In United States agricultural policy, under a marketing contract, prices (or pricing mechanisms) are established for a commodity before harvest or before the commodity is ready for marketing. Most management decisions remain with the grower, who retains ownership of both production inputs and output until delivery. The farmer assumes the risks of production but shares price risks with the contractor.
Marketing contracts are commonly used for crops and not livestock. According to the
USDA
The United States Department of Agriculture (USDA) is the federal executive department responsible for developing and executing federal laws related to farming, forestry, rural economic development, and food. It aims to meet the needs of com ...
, about 40% of the value of all fruits and vegetables produced in 1997 were under marketing contracts. Marketing contract shares for selected other commodities were:
*sugar beets, 82%;
*milk, 60%;
*cotton, 33%;
*cattle, 10%;
*soybeans, 9.4%;
*corn, 8%.
See also
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Production contract
In United States agricultural policy, production contracts specify who supplies the production inputs, the quality and quantity of the commodity to be produced, and the compensation for the producer; under such contracts, the farmer is paid to prov ...
References
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{{DEFAULTSORT:Marketing Contract
Agricultural marketing in the United States