|
Northern Illinois | I understand your rent money question and agree with that line of thought.
I think a better argument would be how could a person expand. Just using round numbers here. If I grow 1000 acres of corn and my cost of production is $3.50 per bu what is the best way to grow my operation if the current price is at or less than my cost of production? I could in theory go rent another 500 acres which would mean I would need to invest in more equipment (in theory. I realize some may be able to grow by 50% without adding equipment) and grow another 100,000 bu and I have grown by 50%. Or if the current price is less than my COP I could go on the board and purchase 20 contracts and put them in my desk drawer. I have again grown my operation by 50%. The argument will be made that a person could hedge their production so they will not lose and if I buy futures I could lose.
frytownfarmer (I believe it was him) last year started a thread about doing this. I think I was about the only person who agreed with him that it makes business sense. He called it Farming The Board. | |
|
What happens next
