The use of contracts for the purchase of agricultural inputs has increased significantly in recent years, as a response to market volatility. According to European sector analyses, an increasing number of farms are opting for forward contracts or medium-term agreements in order to secure supply and price levels.

In practice, however, the benefits are mixed. Early contracting can protect farmers against sudden price increases, but it also limits their ability to adapt in the event of subsequent price declines. Eurostat data from 2024 show that farms which contracted inputs at the beginning of the season, in some cases, incurred higher costs than those purchasing on the spot market.

Another critical issue is the alignment of input contracts with output marketing strategies. The absence of sales contracts or price risk-hedging mechanisms exposes farmers to a significant imbalance: fixed, secured costs paired with uncertain revenues.

Looking ahead to 2026, input contracting should be viewed as a risk-management tool rather than a universal solution. Flexibility becomes just as important as predictability, and the optimal decision depends on farm size and access to capital.

(Photo: Freepik)