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Red River Valley | dpilot83
You can play any diaster that you want, if that is what you beleive than you shouldn't sell anything until it is harvested that's fine most farmers market that way. I'm simply telling you that if yor sitting on grain and own the board and it goes down you are double long and your banker ( if he has nay brains ) will be giving you a call very quickly so if corn is at $4.00 and you have say 25,000 bushels in the bin you have $100,000.00 if you go short the board and corn goes to $8.00 you have 200,000.00 worth of corn and a $100,000.00 margin call but if you are long and it goes to $2.00 then you have $50,000.00 dollars of corn and a $50,000.00 margin call which leaves you at ZERO
selling beyond you Insurance number anytime when you don't think your going to get a crop is risky there is no way to off set that risk without taking on a differant kind of risk. or paying additional premium for that risk.
In farming there is no way to remove all risk just ways to mitagate it. Being long the board and long the bin or the field just doubles your risk. | |
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How do you price/protect 'unknown' production?
