Abstract
This paper estimates the value for price- and quantity-fixing contracts to trade weaned piglets from farrowing farms to finishing farms. These values are estimated using quasi option values, driven up by volatile returns to investment in hog production units. The results suggest that hog producers have an incentive to choose vertically coordinated or integrated production systems when investing in hog production. The value of the price- and quantity-fixing contract was estimated as 7.3 per cent of the investment outlay in farrowing units and 2.7 per cent of the investment outlay in finishing units. The corresponding value of the option to suspend production in finishing units was estimated at 1.7 per cent.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
