General comments/chat, page-22410

WRONG.
The farmer must forward Sell , when forward prices are at average and favourable - to secure profits of % of crops already planted or fully planned to be planted.
Farms and primary producers have enormous , enormous sunk costs intrinsic in their farm operations setup , in the land they fallow , machinery acquisition, taking on employees , life decisions and farm management for years ahead .
Forward selling out more than 12 mths is rare and be only major sized producers . Really not relevant nor would agriculture commodity or banks greatly support price risk out more than 12 mths . But the next 12 mths is always critical.

”Anything can happen at any time “ .
“The markets can do anything at any time “.

Mainly % crop forward selling is essential once planting decisions commenced - crop is in train . Not always , but usually if can secure a fair , decent price - only setting a small % of ultimate expected crop.
In the event of a major flood or event , and the farmer loses the crop - forward selling is a fundamental sale and producer is guaranteeing supply or closing out this contract will be fraught .
So forward selling is only limited -
Forward selling exposes the producer to Risk of the world price - they must supply into the contract once set .

Not forward selling means the producer is 100% exposed to risk - has crop they must sell , is committed, a lot of money spent and to be spent , and at mercy of spot price when harvest delivery time occurs .

The biggest risk to the producer overall though is yield , and final production . Even if crop price drops but they have a bumper harvest and high quality - maybe can afford to store some or generally supply into lower prices but compensated by high volume and yield .

Even when selling into spot , with harvested crop-
Global commodity price dictates , with currency & shipping and quality and transport costs - the actual price received . And the futures price has influence on the spot price . ( anticipated next years production- whether to be deficit or surplus , larger crop )