The daily fluctuations in the price of agriculture commodities can have a substantial impact on your operation, from what you pay for inputs like feed to the revenue you earn year after year. Not only does market volatility affect day-to-day decisions, it can also create uncertainty about making long-term investments in your operation.
Price risk management can help you feel far more confident about the decisions you make and the stability of your operation. Done well, price risk management may help you:
- Increase your average price over time
- Smooth out your cash flow
- Improve your ability to build a cost structure that includes new investments
What makes price management effective? With over 30 years of risk management experience, Stewart-Peterson Inc. points to 3 key factors:
1. Make sure that any hedging decisions are made only in support of cash decisions you first make on your production
2. Avoid making decisions based on outlook, which leaves your operation at risk to the whims of the market. Instead, take a strategic approach to help you protect your operation from price risk without giving up opportunity.
3. Think of your marketing as a long-term, consistent approach to building your price.
Are you missing out on face-moving price rallies?
Is accepting the market price worth the risk?
View a weekly commodity report here.
Loan officers at First Citizens Community Bank are committed to helping you protect the investment that you make in your operation. Speak to them about price risk management and how it can help.
A service of Stewart-Peterson Inc. Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Presented for solicitation. 800-334-9779 | www.stewart-peterson.com/market360 | Talk to Stewart-Peterson's Kellie Czarnecki at 800.334.9779 to learn more about effective price risk management.