We investigate the competitive effects of spot-price contracting, in which a buyer and seller contract to transact at a future date at the price prevailing in that market (the “spot price”) at that future date; such contracts are ubiquitous in the beef-processing industry. We show that spot-price contracting can facilitate collusion: When such contracts are available, firms can maintain monopsonistic prices at much lower market concentrations than in standard models of Bertrand competition, and some degree of non-competitive pricing can be maintained for any market concentration. We also show that the effect of differentiation on collusion in this setting is ambiguous: Monopsonistic pricing is most easily maintained at either high or low levels of differentiation, while more competitive pricing arises at intermediate levels of differentiation.