Sunflower Production Contracts: Provisions and Analysis

Provisions of sunflower production contracts in North Dakota and Minnesota are summarized in this report. A procedure which can be used to compare the economic value of contracts is also presented. Extensive commercial production of sunflowers is relatively recent. Contracts provide growers with an assured market, guaranteed price, and assistance in proper growing practices. Processors and marketing agencies can better control quality and supply through contracts. The proportion of sunflower growers under contract has been declining as farmers become more familiar with the crop, because of expanding market outlets, and because several contractors wish to avoid costs of contracting. Sunflowers are contracted directly with contractors or through their agent country elevators. Contracts generally specify acreage, price, quality, delivery, and payment provisions. Provisions of 17 contracts are summarized and a method of selecting the most profitable contract is explained.