Corn & Bean Prices Are Approaching the Spring Price
As I type this post, December corn futures are currently trading at $5.59 and November beans futures are at $12.84. Both of these prices are within a few pennies of the spring price that was set based on the average February prices of these futures contracts ($5.65 and $12.87, respectively). It is interesting that after 3 months of trading that both contracts are within this range.
Now that these prices are getting back to these levels, are you upgrading your 2013 crop budgets to determine if you need to hedge any of your bushels that are not covered by crop insurance. Although weather may push prices higher, a couple of weeks of good weather can push them lower too. We are not recommending a hedge, but rather, check your budget to see if hedging part of your crop at these prices makes sense.
We see too many farmers that try to get $13 or $8, when the price is with a few pennies of this price and a month later, the price is a $1 or $2 lower.
Remember, you are in the farming business and when you can hedge in a good profit, it may be prudent to do.
Paul Neiffer, CPA
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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