They would like you to make some profit all the time rather than be subject to the roller coaster peaks and valleys of the hog price cycle. It's a way of leveling income, not necessarily increasing it. Before you commit yourself to a forward price, you should know your cost of production, so you know how much profit a certain forward price is giving you. There are several ways to do forward pricing. It is then your responsibility to deliver the hogs to the designated plant during the designated month.
Producers can trade futures contracts directly, through a broker.
However, in doing so, there are several details they have to deal with that the above marketing agencies handle. These details include the US-Canadian dollar exchange, the basis and margin money. Trading futures contracts directly requires time and expertise. Help is available from industry consultants for those interested in pursuing this alternative. This is a new venture recently launched by Rod Weenink and Tony Moulds.