USA | Dave Cen.Ia - 2/23/2017 09:06
"Anything sold ahead should be sold on the board and margind by the seller vs hiding behind another party."
I guess it's all in the perspective but .... in a forward contract (at least the ones I am exposed to) it appears to me that the producer is taking all the risk and it is the processor or intermediate handler is covering risk (possibly known as hiding behind another party) to control the situation.
In regards to spec activity, planting the crop is a spec trade, is it not? And finally, improving the bottom line can be affected from the sales side as well as the purchase side. Maximizing both would certainly be to one's advantage.
Would agree farmer has risk by spec selling, the risk is even higher and more costly when hiding by another party vs taking matters in your own hands dealing straight with the board with your own money. Spec selling isn't where the big bucks come from, when it comes to the bottom line year in and out. It is COP control and productive time management that provides the horsepower to pull ahead of others in the farming game.
Rev crop insurance takes the spec out of planting a crop for the most part. If crop is planted before final plant date and you don't quit breathing $ are guaranteed ,except for basis risk. Which can be managed with on farm storage. |
Lots of talk about new crop sales...
