Preharvest Marketing Strategies Increase Net Returns for Corn and Soybean Growers

Robert N. Wisner, E. Neal Blue and E. Dean Baldwin

Review of Agricultural Economics, 1998, vol. 20, issue 2, 288-307

Abstract: Grain producers price grain prior to harvest to reduce financial risk and to enhance net returns. Because accomplishing the second objective is debatable, alternative corn and soybean preharvest options and hedge marketing strategies were designed to test the hypothesis that preharvest pricing could generate statistically higher average net returns than harvest sales without increasing variability. Weekly seasonal futures price patterns from 1975 to 1994 were used to time marketings. The strategies were applied to Iowa and Ohio model farms. The hypothesis was accepted for some strategies that included options but not for futures-only strategies.

Date: 1998
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