Wisner, Robert N.

ISU Extension, No. PM 1697a (December 1996)

Grain contracts are important tools for managing price and income risk in the volatile environment Successful use requires a complete understanding of how various contracts work, the kinds of risk they are designed to control, and the areas of risk that remain after the contract is signed. Some contracts require only one decision: whether to use the contract. More complex types require one or more decisions after the contract is signed. Good business rules in grain contracting are (1) understand the contract before you sign it, (2) know and communicate with the firm or individual with whom you are doing business, and (3) understand the decision processes required for successfully using the contracts you select.