Agricultural production contracts are agreements between producers and contractors, typically agricultural commodity processors, that detail an arrangement for raising agricultural commodities. These contracts usually identify the production practices to be used, identify the party responsible for supplying the required resources, and specify the quantity, quality, and method of payment for the product. Farmers and ranchers utilize production contracts as a tool to manage the risks inherent in agricultural production, and agribusinesses employ production contracts to manage risk and to control expenditures. The legal implications of production contracts are unique to each jurisdiction because the law of each state governs their interpretation. In addition, variations in terms and language contained in individual production contracts make each one distinct. Read the full overview
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