Scratch and Claw Your Way to Market Opportunities

March 28, 2018 03:38 PM

If prices continue to trend sideways it may require searching out opportunities to make money rather than just waiting for a weather-driven rally. 

Brian Doherty of Stewart-Peterson told Clinton Griffiths on AgDay TV that this year may require farmers to look in places other farmers aren't.  

"As the reliability of crop production increases, which we've got evidence it does, there's still volatility and potential for adverse weather," says Doherty.  "As a farmer, you're a producer and an inventory manager."

Those two hats require thinking about business in different ways says Doherty. 

"Looking out six months, I can sell an out of the money call option that's 40 cents out of the money for 12 cents," Doherty gives as an example. "The only way that comes back to haunt me and makes that position a loser is if the price goes higher."

But, he says that means any unpriced inventory also gains value and there is a risk and cost to everything.

"To create opportunity this year may require that you claw and scratch for the next 15 or 25 cents," says Doherty.  "Every farmers has to decide if it fits there tolerances and is it good for their operation."

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