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Agricultural Contracting Update, 2005

Author

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

Abstract

More than half of all transactions for U.S. agricultural products are still conducted through spot market exchanges, in which commodities are bought and sold in open market transactions for immediate delivery. But a growing share of U.S. farm production is produced and sold under agricultural contracts. Such 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. The shift of production to contracting coincides with shifts of production to larger farms. Contracts are far more likely to be used on large farms than on small ones. Marketing and production contracts covered 41 percent of the value of U.S. agricultural production in 2005, up from 39 percent in 2003, 36 percent in 2001, and a substantial increase over 28 percent in 1991 and 11 percent in 1969.

Suggested Citation

  • MacDonald, James M. & Korb, Penelope J., 2008. "Agricultural Contracting Update, 2005," Economic Information Bulletin 58639, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersib:58639
    DOI: 10.22004/ag.econ.58639
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    Cited by:

    1. Adjemian, Michael & Brorsen, B. Wade & Hahn, William & Saitone, Tina L. & Sexton, Richard J., 2016. "Thinning Markets in U.S. Agriculture," Economic Information Bulletin 232928, United States Department of Agriculture, Economic Research Service.
    2. Paulson Nicholas D & Katchova Ani L & Lence Sergio H, 2010. "An Empirical Analysis of the Determinants of Marketing Contract Structures for Corn and Soybeans," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 8(1), pages 1-25, May.
    3. Felicetta Carillo & Francesco Caracciolo & Luigi Cembalo, 2017. "Do durum wheat producers benefit of vertical coordination?," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 5(1), pages 1-13, December.
    4. Scott W. Fausti & Matthew A. Diersen, 2020. "Competitive forces affecting capacity decisions of South Dakota feedlot operations," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 459-473, May.

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