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Moorhead, MN | Is to use options (primarily CME puts or the put embedded in your crop insurance). Buying puts isn't cheap (Dec '13 $6.20 put is $.58 today) but they do leave your upside completely open.
Let's say the spring price is $6.30, you buy 80% crop insurance, and yield your APH, your crop insurance futures floor price would be $5.04 (not too exciting if you ask me).
If I were in your shoes, I'd sell 25% of my new crop corn (25% of APH) for $6 cash (harvest price if you can get it) and buy 80% enterprise unit RP. I'd bet your cost of production on corn @ an APH yield is $4.40-4.80.
Predicting the future is really, really hard. It's about managing your risk. If you could predict the future, you'd be in a different business.
If you sell 25% of your crop and have a complete crop failure, it will sting if you have to buy out of those contracts but you'll still be in the game.
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Small operation marketing plan for 2013?
