Hedging is a big scary word to many farmers. And it’s understandable — it’s an account that can flucuate significantly, making it seem like you’ve lost money. But, unlike speculators that never grow or store crops, farmers are in a unique position to use hedging as a low-risk price management tool. Why? Because as your hedge account drops in value, the physical crop in the bin or in the field is increasing in value. Simple, right? Well, yes and no.
In this video, Chris Corbett, FarmLink Marketing Solutions, runs through some of the common reservations farmers have about hedging. He explains why hedging really shouldn’t make you any money, but it shouldn’t cost you any, either. What’s more, Corbett discusses why following futures markets makes sense even for those who will never hedge, why taking a short course in the subject is a good idea and why he thinks it might be time to change the term “hedging” to something less scary.
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