This article presents teaching materials for teaching forward contracts in undergraduate courses in agribusiness and agricultural economics programs, as well as educational materials for Extension and outreach activities. The teaching materials include: (a) an introduction to spot and forward contracts as market exchange mechanisms and an explanation of the main differences between these two types of contracts; (b) a discussion of the business rationale for using forward contracts, as compared to spot contracts; (c) a simple economic framework explaining the mechanics of forward contracts; and (d) analytical problem sets demonstrating applications of this framework in the U.S. beef, pork, and milk supply chains. The teaching note includes analytical problem sets, multiple choices questions, and answer keys for all questions.

Adjemian, M.K., B.W. Brorsen, W. Hahn, T.L. Saitone, and R.J. Sexton. 2016. Thinning Markets in U.S. Agriculture: What Are the Implications for Producers and Processors? Washington DC: U.S. Department of Agriculture, Economic Research Service, Economic Information Bulletin Number 148. https://www.ers.usda.gov/webdocs/publications/44034/56926_eib148.pdf?v=0

CME Group. 2022. https://www.cmegroup.com/

Greene, J.L. 2019. Livestock Mandatory Reporting Act: Overview for Reauthorization in the 116th Congress. Washington DC: Congressional Research Service, CRS Report R45777. https://sgp.fas.org/crs/misc/R45777.pdf

Heifner, G., B.H. Wright, and G.E. Plato. 1993. Using Cash, Futures, and Options Contracts in the Farm Business. Washington DC:

U.S. Department of Agriculture, Economic Research Service, Commodity Economics Division, Agriculture Information Bulletin Number 665. https://naldc.nal.usda.gov/download/CAT93973963/PDF

Ling, K.C., and C.B. Liebrand. 1996. Dairy Cooperatives’ Role in Managing Price Risks. Washington DC: U.S. Department of Agriculture, Rural Business–Cooperative Service, RBS Research Report 152. https://www.rd.usda.gov/sites/default/files/rr152.pdf

MacDonald, J.M. 2015. “Trends in Agricultural Contracts.” Choices 30(3). http://www.choicesmagazine.org/UserFiles/file/cmsarticle_461.pdf

MacDonald, J.M., and P. Korb. 2011. Agricultural Contracting Update: Contracts in 2008. Washington DC: U.S. Department of Agriculture, Economic Research Service, Economic Information Bulletin EIB-72. https://www.ers.usda.gov/publications/pub-details/?pubid=44526

MacDonald, J.M., J. Perry, M. Ahearn, D. Banker, W. Chambers, C. Dimitri, N. Key, K. Nelson, and L. Southard. 2004. Contracts,

Markets, and Prices: Organizing the Production and Use of Agricultural Commodities. Washington DC: U.S. Department of Agriculture, Economic Research Service, Agricultural Economic Report Number 837. https://www.ers.usda.gov/webdocs/publications/41702/14700_aer837_1_.pdf?v=0

Paul, A.B., R.G. Heifner, and J.W. Helmuth. 1976. Farmers’ Use of Forward Contracts and Futures Markets. Washington DC: U.S. Department of Agriculture, Economic Research Service, National Economic Analysis Division, Agricultural Economic Report No. 320. https://naldc.nal.usda.gov/download/CAT76671306/PDF

Prager, D., C. Burns, S. Tulman, and J. MacDonald. 2020. Farm Use of Futures, Options, and Marketing Contracts. Washington DC:

U.S. Department of Agriculture, Economic Research Service, Economic Information Bulletin Number 219. https://www.ers.usda.gov/webdocs/publications/99518/eib-219.pdf?v=8179.1

Roy, E.P. 1963. Contract Farming, USA. Danville IL: The Interstate Printers & Publishers, Inc.

Shields, D.A. 2011. Risk Management Tools for Dairy Farmers. Washington DC: Congressional Research Service, CRS Report R41854. https://nationalaglawcenter.org/wp-content/uploads/assets/crs/R41854.pdf

U.S. Department of Agriculture, Agricultural Marketing Service. 2022. “Grades and Standards.” https://www.ams.usda.gov/grades-standards

Wolf, C.A. 2012. “Dairy Farmer Use of Price Risk Management Tools.” Journal of Dairy Science 95:4176–4183.

Wolf, C.A., and N.J. Olynk Widmar. 2014. “Adoption of Milk and Feed Forward Pricing Methods by Dairy Farmers.” Journal of Agricultural and Applied Economics 46:527–541.