| The main objective of this dissertation is to conduct a systematic analysis of the determinants of farmers' choices to use individual or combinations of marketing arrangements in various farm enterprises (crops and livestock) and to measure farm-level economic benefits associate with having access to those marketing channels relative to having access to cash or spot markets alone. To achieve this goal, the dissertation has three main chapters to conduct economic analysis.;First, I examine the determinants of farmers' choices of marketing arrangements which include different combinations of open market sales, marketing contracts and production contracts. Data for this analysis come from USDA's 2004 Agricultural Resource Management Survey (ARMS). The results show some empirical support for the agency theory, which has been recently proposed to explain the rising popularity of alternative marketing arrangements (AMAs). In addition to obtaining the results using a national sample, the empirical analysis is also repeated for each of the five agricultural regions in the US. Results from these regional models are consistent with those of the national model, indicating the robustness of our results.;Second, I estimate a discrete choice random utility maximization model, in which I control for both the observed and unobserved choice characteristics, for multi-enterprise farmers' joint decisions on which commodities to produce and which marketing channels to use to market their outputs. I then use the estimates to quantify the benefits to U.S. farmers from having access to particular alternative marketing arrangements. I find that, applying the results to a national basis, the benefit of using production contracts to hog farmers is ;Last but not least, I examine the complementarities and substitutabilities among different marketing arrangements in Midwest and South. I estimate a group of Probit models to examine the farmers' decision on whether or not adopt a specific marketing strategy. Then, I apply the correlation coefficient method to the residuals of those Probit models. Besides observed farm/farmers' characteristics, a term of unobserved heterogeneity is also included in the Probit models. The results show empirical evidence of the complementarities and substitutabilities among different marketing arrangements. Complementarities are found between the spot market and AMAs among and cross grains and industrial crops, and are found between the livestock production contracts and grain marketing arrangements. Substitutabilities are found in the livestock sector and are found between livestock and grain sector for the spot market and the marketing contract. |
