Production and marketing contracts govern 36 percent of the value of U.S. agricultural production, up from 12 percent in 1969. Contracts are now the primary method of handling sales of many livestock commodities, including milk, hogs, and broilers, and of major crops such as sugar beets, fruit, and processing tomatoes. Use of contracts is closely related to farm size; farms with $1 million or more in sales have nearly half their production under contract. For producers, contracting can reduce income risks of price and production variability, ensure market access, and provide higher returns for differentiated farm products. For processors and other buyers, vertical coordination through contracting is a way to ensure the flow of products and to obtain differentiated products, ensure traceability for health concerns, and guarantee certain methods of production. The traditional spot marketthough it still governs nearly 60 percent of the value of agricultural production-has difficulty providing accurate price signals for products geared to new consumer demands (such as produce raised and certified as organic or identity-preserved crops modified for special attributes). We are likely to see a continuing shift to more explicit forms of vertical coordination, through contracts and processor ownership, as a means to ensure more consistent product quantity and quality.

this work was provided by the Risk Management Agency, USDA. The views expressed in this article do not necessarily represent those of the University of Maryland or USDA.

The advent of inductively coupled plasma-atomic emission spectrometers (ICP-AES) equipped with charge-coupled-device (CCD) detector arrays allows the application of multivariate calibration methods to the quantitative analysis of spectral data. We have applied classical least squares (CLS) methods to the analysis of a variety of samples containing up to 12 elements plus an internal standard. The elements included in the calibration models were Ag, Al, As, Au, Cd, Cr, Cu, Fe, Ni, Pb, Pd, and Se. By performing the CLS analysis separately in each of 46 spectral windows and by pooling the CLS concentration results for each element in all windows in a statistically efficient manner, we have been able to significantly improve the accuracy and precision of the ICP-AES amdyses relative to the univariate and single-window multivariate methods supplied with the spectrometer. This new multi-window CLS (MWCLS) approach simplifies the analyses by providing a single concentration determination for each element from aI1spectral windows. Thus, the analyst does not have to perform the tedious task of reviewing the results from each window in an attempt to decide the correct value among discrepant analyses in one or more windows for each element. Furthermore, it is not necessary to construct a spectral correction model for each window prior to calibration and analysis:-When ..

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In a series of focus groups during 2001 and 2002, organic farmers from different regions of the United States identified a wide range of risks to their operations. The focus groups were facilitated by the University of Maryland in cooperation with a research team from USDA's Economic Research Service, to explore the risks faced by organic farmers, how they are managed, and needs for risk management assistance. Contamination of organic production from genetically modified organisms was seen as a major risk, particularly by grain, soybean and cotton farmers. Focus-group participants producing grains and cotton-many of whom knew about and had obtained crop insurance-raised concerns about coverage offered, including the need for insurance to reflect the higher prices received for organic crops. Most fruit and vegetable producers participating in the focus groups had little knowledge of crop insurance. When provided with basic information about crop insurance, operators of small fruit and vegetable farms were skeptical about its usefulness for their type of operation.