Farmers' Use of Marketing and Production Contracts

Farm Business Economics Branch, Rural Economy Division and Economic Research Service

No 262041, Agricultural Economic Reports from United States Department of Agriculture, Economic Research Service

Abstract: Contracts are an integral part of the production and marketing of selected livestock commodities, such as broilers, turkeys, eggs, and milk. Such crops as fruit, vegetables, and sugar beets and cane are mostly produced under contracts. In the past, farm receipts were assumed to be distributed across all farm families in proportion to their production. Today, contractors receive a large share of farm receipts, formerly assumed to go to the operator's family. Contractors typically bear a large share of production and price risk, and earn the majority of net income from the commodity's production. Farmers may benefit by being able to expand their operations more rapidly than otherwise possible--perhaps with less debt and fewer financial risks.

Keywords: Industrial Organization; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 25
Date: 1996-12-01
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uerser:262041

DOI: 10.22004/ag.econ.262041

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