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Contracting


  • Basis Contract
    USDA, Risk Management Agency, September 1997

    A basis contract transfers the basis risk and opportunity from the seller to the buyer on the date of the contract. The producer has eliminated the "basis" part of price risk, but has retained the futures risk.
  • Fixed Price Contract
    USDA, Risk Management Agency, September 1997

    A fixed price contract transfers all price risk and opportunity from the seller to the buyer on the date of the trade.
  • Contracts as a Risk Management Tool
    Charles Hall and Michael Langemeier, Texas Agricultural Extension Service, March 1999

    A contract is usually defined as a written or oral agreement between two or more parties involving an enforceable commitment to do or refrain from doing something.
  • Legal Issues Involving Cash Forward Grain Contracts
    Roger A. McEowen, Texas Agricultural Extension Service, October 1998
    Cash forward grain contracts are subject to some aspects of commercial law. Commercial laws are generally the same across all jurisdictions.
  • Cash Grain Contracts
    USDA, Risk Management Agency, September 1997
    Producers should carefully evaluate a contract's risk/reward profile before entering into any contract to make sure that their financial situation, production prospects, and personal preferences for risk are consistent with a specific cash grain contract or marketing strategy.
  • Minimum Price Contract
    Mark Waller, Steve Amosson, William Tierney and Kevin Dhuyvetter, Texas Agricultural Extension Service, April 1998
    The advantages include; locks in a minimum price but has upside potential, provides some leverage in obtaining credit, establishes a price floor and helps in production management decisions, no need to deal directly in futures or options markets, lno margin calls.
  • Understanding Risk in Basis Contracts
    Robert Wisner, Iowa State University, University Extension, February 1997
    Basis contracts are marketing instruments that establish the basis (the difference between the local cash price and futures price) used to determine the price paid for grain or soybeans at a later time.
  • Commonly Used Grain Contracts
    Robert Wisner, Iowa State University, University Extension, December 1996
    Common types of contracts include forward cash, basis, delayed price, minimum price, maximum price (for feed purchases), and hedge-to-arrive contracts .
  • Hog Cash Contracts
    Allen C. Wellman, University of Nebraska Cooperative Extension, 1996
    This publication briefly discusses the traditional provisions of a fixed price forward cash contract for a seller of livestock. This review is followed by a listing of the major types of current long-term hog marketing contracts available to hog producers.
  • Hog Cash Contracts- Advantages and Disadvatages
    Allen C. Wellman, University of Nebraska Cooperative Extension, 1996
    This publication covers the possible advantages and disadvantages of traditional and long-term cash forward contracts for hog producers and for buyers (most often a packer).
  • Contract Hog Production
    Michael R. Langemeier, Kansas State University Research & Extension, July 1993
    The contractor owns and provides feeder pig pinishing contracts and breeding stock for feeder pig production contracts, and typically bears the costs associated with feed, medication, and transportation.
  • Production and Marketing Contracts in the Pork Industry
    Kenneth A. Foster, Cooperative Extension Service Purdue University, August 1993
    This publication points out some of the benefits of contracting for producers to be risk alleviation, reduced capital requirements, stabilized cash flow, and use of idle resources. 
  • Hedging Vs. Cash Contracts
    Lynn H. Lutgen, University of Nebraska Cooperative Extension, July 1977
    There is substantial risk in agricultural production and marketing. Weather, insects, disease, world conditions and other circumstances can affect production and costs.

 

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