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A third of U.S. ag production is under contract
The USDA says about one-third of all agriculture production
is under contract. Nearly half of livestock production is contracted. A report
covering the latest year available – 2017 – says agriculture production under
contract increased only a couple of percentage points in the two decades from
1997 to 2017 but fluctuated yearly.
The share of hogs produced under contract increased from a third in 1997 to
nearly two-thirds in 2017. The number of contract-produced cattle increased
from 17 percent in ’97 to nearly a third of the production in 2017. Dairy production
under contract fell from 58 percent in 1997 to 41 percent in 2017. Ninety
percent of poultry and eggs are produced under contract – up slightly from 1997.
Among soybeans, corn and wheat, soybeans are the most frequently contracted at
only 17 percent.
The USDA says contracts help farmers manage income risks while helping processors
ensure timely flows of inputs and giving them greater control over the
characteristics of what they acquire.
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