Producers with and without marketing contracts were asked a series of questions regarding comments often made by opponents and proponents of marketing contracts (Table 18a and 18b). In general, producers with small operations and those with large disagree on the implications of marketing contracts. Producers with large operations agree that market contracts help coordinate the pork supply chain and are opposed to making them illegal. As operation size declines, producers tend to disagree more strongly. They believe market contracts have caused cash hog prices to decline and that contracts should be monitored closely. While they would rather market their hogs in the cash market, they do not feel as strongly that Congress should make market contracts illegal.
Table 18b compares the responses of producers with and without marketing contracts for medium-sized producers (1,000 to 49,999 hogs annually). The results are as might be expected. Producers with contracts agree more with the positive contract traits and disagree more with the negative contract traits and vice versa. Interestingly, there is little difference in the average response for the entire 1,000-to-49,999 size category. Also, none of the individual comparisons were statistically different.
Source: 2001 Pork Industry Structure Study, John Lawrence, Iowa State University, Glenn Grimes, University of Missouri.