What is in this article?:
- Knowing marketing options can limit price risk
- Requires more cash-in-hand
• There are numerous methods that one can employ to help limit price risk as a seller or a purchaser of a particular commodity.
Oftentimes growers become reliant on a cash price at the point which the product is ready for market and sold at that time.
However, there are methods that can help lock in prices it could require storage or utilizing other marketing techniques.
There are numerous methods that one can employ to help limit price risk as a seller or a purchaser of a particular commodity.
This article cannot cover all of the methods or go in-depth on any individual method due to the articles’ brevity, but the hope is to provide just a quick reminder of the opportunity a producer has.
Producers need to ask additional questions about their own operations, their price risk management strategies, and to seek out those that can provide additional information and assistance such as their local Michigan State University Extensionfarm management regional educator.
Many producers have used a number of available opportunities such as cash forward contracts through their local elevators and co-ops to sell their grain commodities. This allows a producer to lock in a cash price in the future, with an agreement to deliver a specified quality and quantity at certain point in time.