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An E-V Analysis of Pricing Alternatives for Long-Term Marketing Contracts*

Published online by Cambridge University Press:  28 April 2015

Steven T. Buccola  and
Ben C. French
Steven T. Buccola
Affiliation:
Virginia Polytechnic Institute andState University
Ben C. French
Affiliation:
University of California, Davis
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Extract

Increased use of marketing contracts by agricultural firms has stimulated a modest amount of literature in which the principles of decision theory are applied to the contracting problem. Much of this literature has focused on farmers' choices between cash and futures market positions. Others have modeled the influence of annual open market and fixed forward price options on farm growth objectives. Little or no attention has been paid to expressed interest, especially among processors, for suitable long-term (multi-annual) contract price formulae and for a theoretical framework through which to evaluate them. This paper attempts to provide this service in special regard to the tomato and tomato paste contracting problems of a U.S. fruit and vegetable processing cooperative.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 9 , Issue 2 , December 1977 , pp. 17 - 23
Copyright
Copyright © Southern Agricultural Economics Association 1977

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Footnotes

*

This paper is based on a research project funded by the Farmer Cooperative Service, U.S. Department of Agriculture. The authors wish to acknowledge assistance of Jack Armstrong, Assistant Administrator of FCS.

References

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