National Farmers Organization (NFO) is an organization set up by farmers and ranchers to negotiate prices and other terms of sale for their commodities (products). The NFO’s main form of negotiation is collective bargaining, in which it negotiates on behalf of many farmers and ranchers at once.
The NFO also uses risk management techniques to decrease the chance that its members will lose money. For example, the organization helps farmers negotiate contracts that ensure buyers will pay a certain price for an agricultural commodity in the future. Such agreements occur well before the farmers produce the commodity. They protect farmers against loss if the market price of the product falls after the contract is signed.
The NFO collects payments from buyers and distributes shares of the money to its members. In addition, the organization provides reserve funds to protect members in case a buyer does not pay. The NFO also checks the credit quality of potential buyers.
The National Farmers Organization was set up in 1955. National headquarters are in Ames, Iowa.
