The following information is bonus material from Top Producer. It corresponds with the article, “Advisers Stress Cash Sales Now” by Linda Smith in the November 2008 issue.
Producer tools. In an October survey, Top Producer asked readers how often they use various pricing tools. Flat-price cash forward contracts are the most popular, with 64% using them always or frequently and 29% occasionally.
Spot sales are used always or frequently by 36% of the farmers. Another 53% use them occasionally.
Other elevator contracts, such as hedged-to-arrive, minimum price, etc., drop to 25% for the always or frequently used categories and only 13% say they use basis contracts always or frequently.
Sales out of home storage also are very popular, with 88% doing so.
In contrast, only 40% to 50% ever use futures or options.
See the complete survey results on producer tools.
Common mistakes. Asked about marketing mistakes they make, survey respondents say the most common are believing the market has to give them at least their cost of production (12%) and storing crops without protecting the future price (11%). Ten percent say they neglect to price when the market is falling because they hope it will rise.
See the complete survey results on common mistakes made by producers.
