Agricultural Risk Management

Today's agricultural producers take many steps to protect their production risks. Grain producers use the best hybrids, apply optimal amounts of fertilizer, use the latest herbicides and insecticides and buy crop insurance. Livestock producers use the most modern genetics, vaccines and feeding technologies. Yet most producers do not take the necessary steps to protect favorable prices, which controls the ultimate return to their production efforts. This is where FuturesOne can help. You will not only receive direct marketing recommendations, you will stay informed of the latest changes in the market place that influence your prices. We aim to have an educational approach to advance your agricultural marketing knowledge leading to your success.

Making sure you reward yourself for your efforts in farming.

Our goal is to be your agricultural hedging leader, helping you get the most for your production efforts. This will be accomplished through our commitment of keeping you informed, creating marketing decisions that are based on the latest news in the global market place. The marketing recommendations in our programs are based upon market items that are monitored and analyzed virtually on a daily basis to reach appropriate price expectations. These market items are as follows:

• The overall domestic supply and demand situation.
• The overall global supply/demand and global economic situation.
• Weather: local, domestic and important international weather and forecasts are followed on a daily basis.
• Commercial positioning will be tracked through daily activity and the weekly commitment of traders reports released by the CFTC. Tracking the commercial strong hands, such as Cargill and ADM, in the market place plays an important role in these programs.
• Long-term technical analysis and fund positioning to determine when the other large players in the market, the funds, such as Prudential or Salomon Smith Barney, tend to take larger swings in positions.
• Short-term technical signals are analyzed with the goal of finding good price ranges to execute the transactions for the hedging programs.
• Changes in government policy that may change our marketing strategies.
• Cash markets are watched closely for better cash marketing time frames for our customers in their local areas, as well as for signs of improving demand.

What can our Risk Management Program do for you?

• Adds a full-time risk management team to your operation that is a phone call away that will illustrate how to properly use the many marketing alternatives available today. Instead of trying to follow the global commodity markets, your valuable time can be spent doing the things you really enjoy, producing your grain and livestock and taking time for your family.
• Gives you a goal to protect and maximize revenue per acre and not just yield. Analyzing price movement as well as analyzing basis and cost of carry items accomplish this goal. This allows producers to merchandise grain more like a commercial grain firm.
• Determine your risk tolerances, cash flow abilities and target profit areas. Which marketing tools are right for you will depend on your risk tolerances and ability to finance the risk management program for your business. There will be recommendations strictly through the cash market tools if your cash flow ability and comfort with futures are not to a level they need to be. Crop insurance is important and although we do not sell it, we will consult with you to determine the best cost effective insurance appropriate for your operation.
• You the producer will have ultimate control over the activity for your operation. By becoming a client of FuturesOne Risk Management, you are taking steps to lessen your risk, not enhance it. Many producers have a negative bias toward futures transactions; we advise positions that are opposite of your cash position to lessen your overall exposure to adverse price moves. As a producer you have a cash position and market risk year in and year out. We may use futures or futures options to re-own the crop when and if you choose to do so, but we do not advise a client to take a position above your initial cash position. Familiarity and comfort are important and will be stressed in your individual risk management plan.

Added Security

You should gain added security by setting minimum price levels and establishing a minimum revenue level per acre before a seed goes into the ground or setting minimum price levels before a calf goes in the lot or hog is conceived. When your bank knows that you have made steps to guarantee minimum price levels that generally lock in profitable levels, it will add a sense of security to your banker, strengthening your relationship.

By becoming a member of the FuturesOne Risk Management Program you are receiving a service that will keep you informed. You will receive weekly reports via email or regular mail. Livestock marketing will also include strategies for protecting feed costs. Cash markets will be followed in your local areas as well as LDP amounts. You will have added security because you have made steps to manage your price risk along with your production risks. Our goal is for you to feel like a valued client and be proud to call FuturesOne your agricultural hedging leader!

For a FREE analysis of your current risk management program and an illustration of what we can do for you call us today toll free at 1-800-488-5121 or email us at info@futuresone.com.

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