Selling or buying agricultural commodities is full of risk. Prices can rise or fall dramatically. But every business has tools it can use to reduce that risk and to lock in prices it finds acceptable.
Those tools include hedging on the futures market through buying or selling contracts or options. Developing a long-term, written strategy that uses these tools to mitigate risk can make a company stronger and even help it expand when other companies are struggling.
It is a complex job that involves knowledge of agricultural markets and production agriculture and the cooperation of lenders and business partners. Those engaged in risk mitigation must be prepared to deal with both rapidly changing conditions at any time and with long-term cycles of production and price variability.