Item 1919 1964 1975
Contract Almost unknown Growing— One-half of
marketing processed total sales—
fruits and mostly on
vegetables, specification
sugar, handlers
buying on speci-
fication, etc.
One of the most significant changes under way in agriculture is
the trend toward contract farming, involving specifications on what
is produced and what is offered for market. Practically all of our
processing fruit and vegetable crops are grown on contract. This is
also true for sugar beets, hatching eggs, certified seed, and many
other products. Vertical integration, a form of contract production,
involves 95 percent of the broilers produced in this country—and
about 85 percent of the turkeys, 35 percent of the table eggs, 25
percent of the lamb and mutton, 25 percent of the beef cattle, and
10 percent of the hogs.
A large part of the contract farming operations to date has been
production oriented. This has been particularly true in most vertical
integration contracts where the supplier usually furnishes capital and
management and the producer furnishes labor and facilities. The big
push on contracts from now on is going to be on those that start
with the retailer or the processor and reach back to the production
areas. There will be a marked increase in contracts calling for tight
specifications on volume, grade, uniformity, variety, time of delivery,
and other requirements that will assist the trade in meeting the dis-
criminating demands of consumers.
WHAT MUST PRODUCERS DO?
If farmers are to make profitable adjustments to the many changes
arising from the increased use of specifications in production and
marketing, they must:
1. Recognize the changing nature of consumer demand. Some say
that Mrs. Consumer does not know what she wants and she will not
be satisfied until she gets it. But she does know what she wants, and
she is becoming increasingly conscious of grade, quality, degree of
fat, and price differentials. She can be counted upon to respond in
increasing numbers to the “meat-type” hog, the “consumer-preferred
lamb carcass,” less wasteful beef cuts, and other products that cater
to her demands.
2. Relate production decisions to marketing needs. Those who
do will be rewarded. Those who do not will be penalized.
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