Western Iowa | Baby Robin - 4/18/2021 20:39
Chris Barron of Ag View Solutions advocates that if you are selling future years of crops ahead, then you better be locking in the anticipated margin by buying inputs to “lock” the margin in. If Buy $50 k of fert for 2022, you’d sell 50k of grain for oct/nov 2022 to offset.
Otherwise, you’d just be cowboying.
I didn't care for that advise when I heard that, my gut told me it was to general and stupid, and now finally realize why (I am a little slow sometimes)
If you sell 50k of grain ahead, here a safe rule would be 250 acres. So you lock in $400 potash, $700 phosphorus, and $650 NH3 to grow that, you need maybe $125 an acre of fertilizer x 250 acres is $31250. I would hope you can lock in lower than the prices I threw out there.
Looks like to me if you sell 50k bushels of corn, lock in 25-30k in fertilizer.
If you are trying to be a good operator and 'offset' some sales, at least drag your calculator out................... |
Multi year sales
