The pork production industry has been moving toward coordinated efforts where there is an increased linkage between industry participants ranging from input suppliers, to producers, to packers/processors, and the retail or consumer level. Contracts have been used as one of the mechanisms to link the participants. These contracts vary widely, covering such items as production standards or technology that may have food safety associations, inputs to be used in production, market timing, and payments and payment methods, etc. By linking industry participants, hog purchase/production contracts have been used to develop improved organization and flow of products, enhance industry movement toward improved food safety through reduced residues and/or pathogens, develop more uniform products, and spur the movement toward production of leaner pork. In the movement toward leaner pork, the industry has rapidly moved to carcass pricing and lean premiums rather than pricing of the live hog.
Iowa State University
Kliebenstein, James B., "Pork Production Contracts and Food Safety Issues" (1998). Swine Research Report, 1997. 40.