Marketing Choices by Texas Cotton Growers

Abstract

This paper examines marketing choices by southwestern cotton producers in 2010. Producer marketing behavior was modeled in a multinomial logit framework as a discrete choice among forward contracting with a merchant; postharvest cash contracting with a merchant; contracting with a merchant pool; or contracting with a cooperative pool. The most important determinants of cotton cash marketing choices were prior participation in cooperative pools, beliefs about the value of preharvest pricing, beliefs about the performance of merchant pools, willingness to accept lower prices to reduce risk, and several socio-economic variables.