On March 17, 2008; elevators in many areas of the U.S. stopped offering farmers forward price contracts for crops of corn, soybeans, and wheat to be harvested in 2008 and beyond. Forward contracts were reestablished a few days later. On March 31, 2008, the same sequence of events occurred: forward contracts were no longer offered, but reestablished later. Forward contract prices are used extensively by farmers to (a) guide decisions on which crop to plant and (b) to manage the risk that prices will be lower at harvest than at planting. It is not inappropriate to argue that forward contracts are a centerpiece of most farmers’ risk management strategies. Read Dr. Zulauf’s full article here:
http://aede.osu.edu/resources/docs/pdf/3MCP7S4I-X0JN-NRMD-50ZDS7QWFDHOEW9V.pdf