To do this you need to calculate potential profit levels from various sale prices. If you don't calculate your potential profit level, selling at a seemingly good price may actually result in a loss. Selling to meet cash flow needs. Although cash flow needs should not dominate your marketing program, they cannot be ignored. Try to manage your cash flow needs in such a way that it helps and does not hinder your marketing program.
Price risk is of special concern to farmers who are highly leveraged financially.
In marketing, managing risk essentially means not losing sight of the financial consequences of a sale. Farmers and ranchers must develop the proper mix of goals to suit their individual situations. After the goals have been determined, a marketing plan can be developed to achieve the goals. Occasionally the operator will set the objectives and then contract with someone else to assist in developing a marketing plan. Charles H. Rust is a member of the Western Extension Marketing Committee and an Extension Marketing Specialist at Montana State University.