Grain prices can easily shift due to local and global events. It’s worth planning to reduce your risk and make sure you’re getting the absolute most for your grain.
A Grain Pricing Option (GPO) is a target price that is set for a specified number of tonnes and delivery period. It’s really easy. You work with your customer service representative at P&H to set the target price and then walk away. We will call you if the market reaches or surpasses the price you set. As soon as your target price is met, the GPO becomes a legally binding contract.
Big trends in the market are generally seen over the course of weeks or months. But capturing the brief spike in the market is difficult. It can be deflating realizing you missed a nice jump in the overnight markets only to see the price settle back down by the time you glance at the news.
A GPO protects you from missing your target price while you’re sleeping or even seeding, spraying or on vacation. It’s an easy way to get some peace of mind.
You can change the target price for your GPO if the market turns bullish and you think your original target price was too conservative. The only caveat is that you have to change the target price or cancel the order during business hours.
As you build your marketing plan, sell only the portion of your crop that is covered by crop insurance in order to protect yourself from production issues.
Some analysts recommend that growers aim to sell at a price that is above the average price of the year. Talk with your Grain Originator. They can help you think through your target price based on historical data and market projections.
