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Re: Desperately seeking soybeans .....
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Re: Desperately seeking soybeans .....
Yeah jen, he certainly could have borrowed money if nothing mor than the government loan, But he was not guaranteed a better sales price and he needed money for the down stroke on his farm. Borrowing money for speculation is like borrowing money from your bookie.
That is why forward contracting is preferable at time. If you need money for a specific obligation at a specific time, the contract will allow a sale and you no longer need to fret about market price or basis change because you have locked in a sure thing. May other potions be more profitable? Possibly but there are no guarantees. If I were entering a land deal I would want to be assured that nothing conflicted with that objective.
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Re: Desperately seeking soybeans .....
Yup! I can remember the first time I got $3 for my beans and thought i hit the jackpot. Would have been in the early 70's. I also had corn in the crib under seal and marketed that for $3.65 per bushel and forward contracted corn from the combine for $3.15. Thought i died and went to heaven.
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Re: Desperately seeking soybeans .....
Jen
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