THE CHANGING ORGANIZATION OF FOOD MARKETS 235 MINI CASE 12: TO CONTRACT OR NOT TO CONTRACT? Bill Murray and Jim Watson were discussing price is at harvest." "Last year when the their farm prices and returns over coffee one drought pushed up prices I made a lot more morning. "I made a good decision this year than you guys who had signed contracts to when I signed that contract to sell my crops deliver at lower prices," he boasted." "That to my local buyer at a fixed price prior to sounds smart but risky," added the waitress harvest," said Jim. "Without that contract I who poured them both another cup of cof- would have lost money on this year's fee. "Farming is a risky business," said Jim. bumper crop," he said. "Well ... contract- What are the pros and cons of farmers ing can be helpful sometimes," cautioned using contracts to establish prices and deliv- Bill. "but I prefer to wait and see what the ery of their product in advance of harvest