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| I am losing a few bucks/pig today on those that I didn't hedge. But looking into the future there is positive margin. So, why would I cut production today (not breed a sow) if its production can be profitable? A sow farm 'plants a new crop' every month (or week) unlike a grain farmer planting once a year.
There is opportunity for corn production if one looks to the future, instead of looking at 2016 crop that one might still have on the books, or the crop standing in the field that was not priced earlier.
The best margins are often available when they are far enough in the future, that there is risk in getting there. When all the risk is gone (harvest is done, and the crop is in the bin) much of the margin has evaporated. But opportunity still exists. example...Anyone with storage in MN near the river could buy corn today, and sell it for river open delivery, and possible make more/bushel than the grower. | |
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What happens next
