The current virus volatility in the markets will eventually subside, so how can producers plan for what comes after? The current level of volatility in the stock market, the energy market and the commodity market is unprecedented and will continue for the near future, says John Zanker with Risk Management Commodities, “I think we have to assume the volatility will continue for the near term.”
But longer term, Zanker says the market could turn bullish, “At some point, the recovery will likely be significant, especially if some weather issues ensue here in the States. But that’s a huge ‘if’ that can’t be counted on for support.” Zanker says farmers need to think and plan long term. So, how should producers plan for harvest marketing and beyond? Zanker says, “Minimum price contracts will lock in a price but keep upside options open if the rise goes higher.”
Zanker says the administration also needs to consider some new programs that will help growers and will stabilize the market, ”I would suggest they consider floating a voluntary set-aside provision that would be implemented through the prevent-plant clause in crop insurance. If they raised the payment from 55% to 80%, they could get some takers. That’s just a thought that I’m going to run by anyone in government that will listen.”
While short term Zanker is bearish, longer term he is optimistic things will recover. He urges growers to plan now so they can act quickly when and if the recovery comes.