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Contracting in the U.S. Pork and Beef Industries: Extent, Motives, and Issues

Author

Listed:
  • Clement Ward
  • Marvin Hayenga
  • Ted Schroeder
  • John Lawrence
  • Wayne Purcell

Abstract

Contracting has increased significantly in the U.S. livestock-meat sector. Over half of finished hogs and about a third of fed cattle are marketed under some form of contract. Contracting motives vary by type of contract, whether buyer or seller, and by commodity. Several motives for buyers and sellers of finished hogs and fed cattle are identified and discussed. Isues related to contracting per se and the trend toward increased contracting have been raised by contracting opponents, politicians, and economists. Several of these issues are discussed under six headings. Lastly, agricultural economists are encouraged to become actively involved in addresing these issues, especially providing pragmatic education and assistance to those involved in contracting.
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Suggested Citation

  • Clement Ward & Marvin Hayenga & Ted Schroeder & John Lawrence & Wayne Purcell, 2000. "Contracting in the U.S. Pork and Beef Industries: Extent, Motives, and Issues," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 48(4), pages 629-641, December.
    • Handle: RePEc:bla:canjag:v:48:y:2000:i:4:p:629-641
    DOI: j.1744-7976.2000.tb00417.x
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    Cited by:

    1. Xia, Tian & Sexton, Richard J., 2002. "Can Food Processors Use Contracts To Influence Farm Cash Prices? The Competitive Implications Of Top-Of-The-Market And Related Pricing Clauses," 2002 Annual meeting, July 28-31, Long Beach, CA 19776, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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