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Farmers, ranchers, and end-users, learn how to hedge grain price risk using the futures and options market

Commodity Broker Carley Garner Discusses Price Risk Management in the Grain and Livestock Markets.

Farmers, ranchers, and end-users of grains and livestock can use a combination of futures and options to manage price risk while leaving upside potential.

The agricultural business is exposed to dramatic price risk that can be difficult to manage without significant opportunity costs or financial expense. Traditional forms of grain hedging strategies involve buying or selling futures contracts to lock in prices or purchasing put options to create a price floor ahead of the marketing season.

However, thinking outside of the box can offer hedgers the best of all worlds. Hedging price risk doesn't have to be a science, it can be an art. Further, price protection doesn't have to be expensive; in fact, if constructed correctly in the right environment it might even be free!

 

Topics discussed:

Hedge Farm and Ranch Operation Price Risk with Futures and Options

* Why hedge grain and livestock risk?
* Understanding why timing and volatility matters.
* Alternative strategies for hedging price risk with a combination of futures, options, and attention to timing.
* How to hedge price risk with little or no out of pocket expense.

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