|
| If the price is right, about up to my insured bushels (80% of aph). That way I'm hopefully 20-50 bu under my actual yield so I have comfortable margin and it will be unlikely I would ever need to buy back contracts. What it does is set a price (basis and board) that I'm profitable at using the cheapest method to do so - no broker fees, margin calls, etc. I'm not against other tools, but if a price is offered that I like why not stop all price risk on a healthy percentage of my crop - never (er... shouldn't) go out of business making a profit. We use manure for our main fertility source, so my situation may not be a good fit for everyone. If I was more tied to fertilizer prices, I might be looking at different strategies to make sure I didn't go backwards crop vs. fert.
Thanks,
Pat | |
|