Pre Harvest

• Allows lock in of worst case scenario while participating in higher markets should they occur
• Allows approximate worst case buyout in case of crop failure
• Fee based on Option Cost (Premium) and Option Fee
• 5,000 bu Minimum

Example:  Minimum Price as Price INSURANCE

•  
  • You own a $5.00 KC July Wheat Call Option
    • $5.00 is your BASE price
    • IF Futures go to $7.00, your option is "in the money $2.00, and you can get out of your option, adding $2.00 to your price.  Becomes regular Purchase contract.
    • IF Futures go to $4.00, your option is "out of the money $1.00, but you do not take $1.00 of of your minimum price.

Post Harvest

• All features on Pre-Harvest except
  • No buyout needed because bushels are known
  • Ownership costs stop.  No storage and you get your minimum price paid up front.
  • If prices get better and you re-price, you are paid the difference.