Establishing the transfer price : balancing businesses
Establishing an equitable transfer price is part of the marketing agreement between a farm business and a producer-owned, value-added business. The transfer price is the farm price received upon initial delivery, or sale, of the commodity. On the other side of the transaction is the price set by the value-added business for the commodity as an input. The transfer price is different from any other commodity sale because the producer has a stake in the profitability of the farm business and post-farmgate business
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