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Advice on HTA
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Sheep Farmer
Posted 2/12/2019 05:48 (#7315270 - in reply to #7314178)
Subject: RE: Advice on HTA


Northwest Iowa
Take your money now and move on and don’t worry about having to store it in the summer months. Here is a scenario for you.

I know your break even is probably not $4.30 cash but just hang with me because every Farmer more than likely has money borrowed around that 6% level at any point in time.

4.30 cash price today x 6% = .258 per year in interest/365 = .0007 per day x 120 days (March 1 to July 1) = .08 in just interest at the bank.

So your saying your wanting to get: 4.24 + .15 + .06 (basis your hoping for in July basically)= 4.45 cash. Up here it costs us .02 to roll so take that off 4.45 = 4.43 - .08 in interest at the bank = 4.35 cash. .05 difference from your March price.

I know you might get a better basis in July but maybe you won’t also. In my opinion .05 not worth the chance of having grain go bad and if you got the time you can have the work done now instead of in the summer. It costs a lot of money to carry grain in my opinion. Not everybody thinks this way but this gives a guy an idea of how costs can get eaten up by holding grain.
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