Locked in any prices?

A southern Alberta company called DynAgra has launched a farm risk management and crop marketing service called Know-Risk Farm Management. Remi Schmaltz of DynAgra has some interesting observations on the hesitancy of producers to forward sell the 2011 crop. Many, perhaps most producers haven’t sold any new crop even though good prices and some of the biggest margins ever have been available. Canola prices have tumbled in recent days dropping $40 or $50 a tonne from the peak. That’s a reminder that markets don’t go up for forever and despite all the optimism, no one knows what prices will look like after harvest. Of course, a lot of us are hesitant to lock in canola, because of the production risk. Schmaltz is one of the few advisors that I’ve heard talk about canola options. They cost money up front, but there are no surprises and you can participate if the market moves higher. Schmaltz correctly points out that good marketing means knowing your cost of production for each crop. That way you can determine how much margin a particular price will provide. Changes in the cost of fertilizer and fuel are also important unless you have them locked in. Every producer needs a different marketing plan, but the key is to have a plan and base it on good information and analysis.

I’m Kevin Hursh.

DynAgra, an independent Western Canada-based Company, is dedicated to providing growers with the tools to manage the risk and maximize the profitability of their farm business through the continued innovation of agricultural products and services. We are committed to developing and providing growers with the latest in precision agronomics, variable rate technology, soil fertility, crop protection, fertilizers, custom application and financial solutions.