Factors Affecting the Coordination of Agricultural Production and Marketing

Agricultural markets depend considerably less on open market transactions than 40 years ago. Increasingly, the production and marketing of agricultural products have been coordinated by forward contracting, production and marketing contracts, and vertical integration. The degree to which these alternative marketing mechanisms have been employed varies across commodities and products. Production contracts, marketing contracts, and vertical integration dominate in several livestock markets, including broilers, turkeys, eggs and milk, and in most specialty crop markets, including fruits, vegetables and sugar beets. Market transactions have continued to be more important for field crops and the cattle and hog markets although contract production and marketing of livestock, particularly sheep, lambs and hogs, have increased during the late 1980s and the 1990s