One of the big questions many producers are pondering is how high could these prices go? As I've always said no one can predict with certainty what prices will do. Variables like demand, weather, and yields will continue to pull the market in both directions.

The key for producers is to be sure to ask the right questions. Instead of asking how high prices may go, ask the question; “how can I take advantage of high prices and strong profit opportunities?” Many producers at this point no longer have the luxury of making cash sales. Wilting crops with unknown/unreliable yields are becoming impossible to price in the cash market. Some producers who thought they were 30% sold may now be as high as 60% sold or more!

What are some risk management options? First of all, review your crop insurance; understand the exact value of your revenue coverage. Double check your cash sales, calculate a realistic yield and your percent sold, recognizing that this is a moving target as crops may deteriorate further. With this information you can then determine your potential profit situation and current risk.

Next, consider managing this risk and protecting strong grain prices with put options. Don't let these price and profit opportunities slip away. At the very least discuss a potential plan with your marketing advisor!!

If you're not setup to use these tools, now is the time to open an account! Study your individual information and build a plan before these opportunities escape.

I'm not trying to give marketing advice here, but rather, advise you to use these marketing tools. You don't have to use these tools; however, you do have to compete with those who do!

Send me your questions or comments.

cbarron@cb-farms.com