GRAIN
DIVISION PRODUCTS AND SERVICES
(Click Here)
to get current Prices from the Grain Center.
MARKETING CONFUSION??
 Declining Markets? High Fuel Prices? Global Economics? Today's farmer must do more today to make sure he's still here tomorrow. We want to help you in today's
market place. Producers Coop can show you ways to stay in the market, or to protect your down-side risks. We offer a variety of services to meet your marketing needs.
MARKETING TOOLS
Producers Coop has many merchandising tools available to assist you in your grain marketing. These are
a few examples with a brief descriptions and their strong and weak points high-lighted.
FORWARD DELIVERY CONTRACT:
 Forward Delivery Contracts allow the producer to
lock in an elevators price either for nearby or for new crop delivery. The price and the quantity to be delivered are set in the contract.
Positives are: Easily executed, cash price and quantity are fixed, risk of a price decrease is eliminated, have the ability to defer income, title of grain exchanged upon delivery and payment.
Negatives are: Payment not received until grain is delivered, lack of ability to participate in a market rally, required to deliver grain, with a possible penalty for cancellation.
FIXED BASIS CONTRACT:
Basis contracts are similar to forward cash contracts in that they allow the producers to
lock in a basis price, with the futures price to be fixed in the future.
Positives:
Risk of basis decrease is avoided, storage costs and risks can be avoided, allows for future pricing flexibility.
Negatives: Involves the transfer of grain title, required to deliver grain as stated in contract, futures must be established and grain delivered before payment is received,
 risk of a
futures price decrease.
|
MINIMUM PRICE CONTRACT:
The minimum Price Contract is a very safe opportunity for the producer to participate in market movement for further profit. The producer should use when he anticipates a favorable market move that will enhance his base price but wants to market and
lock in
a minimum price.
 Positives: Very safe with all costs defined, receive base price up front, can participate in a market rally with defined risk, can be used with a variety of contract strategies.
Negatives: Lose basis opportunities at harvest time. Premium and service charges may be costly, Must market option to add value, lose time value if producer waits until contract expiration is near to market option, if market has no movement, premium is wasted.
PRICE LATER CONTRACT:
Price Later (delayed price) contracts allow producers price flexibility for an extended time period.
Positives: Price flexibility in both basis and futures price aspects. Delivery and pricing date are not associated, storage costs are reduced, frees up farm storage for new crop.
Negatives: Involves the transfer of grain title, required to deliver grain as stated in
contract, payment is not received until the price is fixed, open to price risks, grain is not covered by the warehouse bond.
CHECK WITH US FOR:
FORWARD DELIVERY
CONTRACT
DEFERRED PAYMENT CONTRACT
PRICE LATER
CONTRACT
ON THE FARM PICKUP
MINIMUM PRICE CONTRACT
BASIS CONTRACTS
PLUS MANY OTHER MARKETING TOOLS
|
