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Real Life Cash Marketing

Spectrum Commodities has put together some realistic marketing challenges that a producer must face and explains some practical alternatives to marketing. These alternatives all share simliar market conditions. By examining these marketing alternatives, we hope you will better understand cash marketing alternatives.

New Crop Hedge Example

In the fall of 1999, a spring wheat producer begins developing a marketing plan for the 2000-growing season. He knows that he will have to market a portion of his crop during the harvest of 2000 to meet his cash flow needs at that time. He has four choices of how to price his production. He can do a 'fixed futures' contract with his elevator. He can do a 'basis fix' contract. He can do a 'minimum price' contract. Or, he can just lock in a straight cash sale. Please use the links to the right to explore these alternatives.