Production contracts, a Biden administration target, have a huge foothold in the livestock industry
A Meat and Dairy Article from All-Creatures.org

FROM Madison McVan, TheCounter.org
February 2022

Marketing contracts, more common for crop producers, obligate farmers to sell a certain percentage of their crop to a specific buyer.

Chickens raised at the University of Illinois Urbana-Champaign - photo by Steve Matzker for Investigate Midwest

According to a USDA report, the percentage of cattle and hogs sold under contract has nearly doubled from 1997 to 2017.

Most poultry, eggs and hogs in the U.S. are sold under production contracts, according to data from the U.S. Department of Agriculture.

Under production contracts, farmers raise livestock owned by someone else — usually a meatpacking company — who pays for some of the cost of raising the animals, such as feed and veterinary care.

Marketing contracts, more common for crop producers, obligate farmers to sell a certain percentage of their crop to a specific buyer.

A September 2021 press release from the Biden administration blamed production contracts for low prices in the cattle industry, saying they “lock independent livestock producers into prices that aren’t the product of free and fair negotiation” - Addressing Concentration in the Meat-Processing Industry to Lower Food Prices for American Families.

A bipartisan bill introduced in the U.S. Senate seeks to raise cattle prices by increasing price transparency to give farmers more negotiating power and by requiring meatpackers to purchase a certain percentage of their animals on the cash market instead of under contracts - Grassley, Fischer, Tester, Wyden Announce Plan To Improve Fairness In Cattle Market.

The percentage of cattle and hogs sold under contract has nearly doubled from 1997 to 2017, according to the USDA. 

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