In fact, that is what is exactly happening now.
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I agree furrow. A great great farmer
once told me how he only grew Flax on
his last year farming. Presold 90% then
it froze in first week of August. Had a
nice Auction sale though.
Its a simple process. Sell some for Cash
off combine. Like our peas at just over
8. We have a shit show on peas but with
whats still in bin and what should make
it will easily cover the contract.
I have half mill in presold. Thats
enough to get to January. Once its in
the Bin its a lot easier. But this idea
that you have to give a crop every
single thing to try to get it to make it
till fall. Mother nature throws a curve
ball all the time. But if your in panic
mode all stops are out for some.
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I don't think anyone is suggesting selling 100 % of
your expected new crop. What is being suggested is
there is a good probability that prices over the
2012/13 crop year will be lower than current new
crop offers. Everyone can take this information and
make their own decisions.
Being 20 % priced new crop and carrying 80 %
unpriced is a good strategy for an individual
manager. My only caveat is farmers with big cash
flow needs this fall should have a significant portion
of these financial needs covered via forward pricing
and make sure they are carrying risk protection on
both production and price insurance (options). But
again, a very individual decision based on the farm
businesses financial needs and the managers
personal risk preference. No one size fits all
recommendation from me.
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