Agricultural Contracting Update: Contracts in 2003

by James M. MacDonald and Penni Korb

Marketing and production contracts covered 39 percent of the value of U.S. agricultural production in 2003, up from 36 percent in 2001 and a substantial increase over estimated values of 28 percent for 1991 and 11 percent in 1969. Large farms are far more likely to contract than small farms; in fact, contracts cover over half of the value of production from farms with at least $1 million in sales. Although use of both production and marketing contracts has grown over time, growth is more rapid for production contracts, which are largely used for livestock.

Keywords: farm structure, production contracts, marketing contracts, farm size, contracting, vertical coordination, market structure, risk analysis

In this publication...

• Entire Report
• Report Summary
• Abstract, Acknowledgments, Contents, and Summary
• Summary
• What Are Agricultural Contracts?
• Data on Contracting
• How Contracting Has Grown
• Prices, Fees, and Terms in Agricultural Contracts
• Conclusions
• References
• Appendix