Todd Davis, Extension Economist, University of Kentucky
The potential for farmers to lock-in substantial corn profits with a cash-forward contract has been limited so far this spring. Assuming the per bushel total variable cash costs plus per bushel cash rent for corn in Western Kentucky is $3.85/bushel, a cash-forward contract would not provide any cushion to cover fixed costs, service debt, provide for family living, and to fund future business growth.
The potential for farmers to lock-in substantial corn profits with a cash-forward contract has been limited so far this spring. Assuming the per bushel total variable cash costs plus per bushel cash rent for corn in Western Kentucky is $3.85/bushel, a cash-forward contract would not provide any cushion to cover fixed costs, service debt, provide for family living, and to fund future business growth.