GRAPHIC: Production Contracts, A Biden Administration Target, Have A Huge Foothold In The Livestock Industry

Feb 17, 2022

Most poultry, eggs and hogs in the U.S. are sold under production contracts, according to data from the U.S. Department of Agriculture.

Under production contracts, farmers raise livestock owned by someone else — usually a meatpacking company — who pays for some of the cost of raising the animals, such as feed and veterinary care.

Marketing contracts, more common for crop producers, obligate farmers to sell a certain percentage of their crop to a specific buyer.

A September 2021 press release from the Biden administration blamed production contracts for low prices in the cattle industry, saying they “lock independent livestock producers into prices that aren’t the product of free and fair negotiation.”

A bipartisan bill introduced in the U.S. Senate seeks to raise cattle prices by increasing price transparency to give farmers more negotiating power and by requiring meatpackers to purchase a certain percentage of their animals on the cash market instead of under contracts.

The percentage of cattle and hogs sold under contract has nearly doubled from 1997 to 2017, according to the USDA.

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Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.