Price fluctuations last year had everyone wondering if the old ways of marketing a crop just don’t work anymore. Familiar, tried-and-true marketing methods seem to have been blown to pieces, and the new norm appears to be greater volatility.
Market volatility has nearly doubled since 1980. Within the last four years, it has reached new, often record, levels. Just look at the drastic changes between 2005 and 2008 and you’ll see market effects caused by the Commodity Index Fund, tight grain and oilseed supplies, the rush by investors to move money into commodities as an inflation hedge, and increased ethanol mandates.
Regardless of the reasons behind market volatility, the important question is this: Does volatility work for you not against you? Here is what the CHS Grain Marketing experts suggest to help manage market volatility:
- Identify breakeven per acre. The earlier you determine cost per acre, the more marketing opportunities will unfold.