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Agricultural Contracting Update: Contracts in 2008

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  • MacDonald, James M.
  • Korb, Penelope J.

Abstract

Marketing and production contracts covered 39 percent of the value of U.S. agricultural production in 2008, up from 36 percent in 2001, and a substantial increase over 28 percent in 1991 and 11 percent in 1969. However, aggregate contract use has stabilized in recent years and no longer suggests a strong trend. Contracts between farmers and their buyers are reached prior to harvest (or before the completion stage for livestock)and govern the terms under which products are transferred from the farm. Contracts are far more likely to be used on large farms than on small farms, and they form one element in a package of risk management tools available to farmers. Production contracts are used widely in livestock production, while marketing contracts are important to the production of many crops.

Suggested Citation

  • MacDonald, James M. & Korb, Penelope J., 2011. "Agricultural Contracting Update: Contracts in 2008," Economic Information Bulletin 101279, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersib:101279
    DOI: 10.22004/ag.econ.101279
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    References listed on IDEAS

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    Keywords

    Agribusiness; Farm Management; Livestock Production/Industries; Risk and Uncertainty;
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