In the Real World

[Ajax]

cowman,

I didn't see where Tom said he priced 40 bus an acre @ 8.00 for crop in the ground. He stated "about 65% priced at average yields of our 2005 crop on Canola @ about $8/bu". Even if his average yield is 40 - that is still only 26 bu/ac. A little bullish but quit obtainable. Crop insurance a little creative marketing to cover a market rise and one doesn't even have to worry how move it when space gets tight. Sounds like a smart way to move grain.

As for $2.25 barley, no one will get rich. We would all like to get $3 but if one could have a long term production contract that I could guarantee that I would have cash flow that I can count on that’s ok to.

Storing grain long term has it’s own risks, maybe buying options would be an easier way to make sure that one has the ability to fill a contract.

Ajax

[katoe]

TOM4CWB,In the real world, as you know,5.00 plus wheat was available for the 04-05 crop year with a cwb fixed price contract. For eg. on May 4/04 the fixed price was 237.70 or 6.47 bu.It netted 5.39 bu.into a car and money in the bank.No risk management available?

[nw9flynn]

The fixed price contract is a excellent tool that many farmers never use. Last years price is a great example. I'm not saying that farmers should lock up 100% of their production but producers should look at locking up 10% for at least some kind of protection from falling markets. I know I am.

[onearm]

wd9
there is no risk in weather, there is a 100 % chance of it. true partnerships between buyer ands seller would be more than 3 or 5 years and would have built in balances. But you would lose than chance for the big score and this is what you are really scared of; missing an opportunity to make more money.