Q. What are the general terms of production contracts in livestock?
A. According to a USDA survey for 2001,
contract terms vary widely across farms. However, some
terms are more common than others.
| Contract terms for livestock
operations with contracts, 2001: |
|
|
Poultry |
Hogs |
Cattle |
| Contract terms: |
Percent
|
| The contract had a confidentiality clause |
16
|
27
|
4
|
| Farmer was required to make
investments in equipment or facilities
|
84
|
44
|
40
|
| Farmer was required to purchase inputs from a
specific source |
10
|
24
|
d
|
Farmer was responsible for manure
management
|
92
|
96
|
80
|
| Farmer was penalized for reduced production due to weather, including death loss |
51
|
15
|
32
|
|
Farmer was required to deliver the product
|
2
|
11
|
25
|
| Length of the contract: |
|
<3 months
|
35
|
na
|
20
|
|
3-12 months
|
49
|
561
|
80
|
|
>12 months
|
16
|
44
|
d
|
| Source: 2001 Agricultural and Resource
Management Survey, USDA |
|
1 Contracts of less than
12 months are included in category for 3-12 months.
na=Contracts of less than 12 months are included in category
for 3-12 months.
d=Insufficient data for disclosure.
|
For example, regardless of the livestock species, most livestock
producers with production contracts are responsible for manure management.
Other terms vary by the livestock species. In poultry, for example,
producers are commonly required to make long-term investments in
equipment and facilities, although most of the contracts are for
terms of less than 1 year. Confidentiality clauses are more common
in hog contracts than they are for poultry or cattle.
|
