Both methods reduce marketing risk. Thus, lenders usually will advance credit more readily and in larger amounts against growing or stored crops hedged or cash contracted. Many lenders today are requiring their borrowers to forward price. If you are financially independent, and can take risks and survive if they go against you, you may prefer to take your chances with the cash market. You simply produce or store unpriced.
Many growers prefer to avoid risks.
They are unable because of financial commitments or unwilling because of temperament to assume the risks of adverse price changes. They avoid price risks and hedge by locking in a desired profit with cash or futures contracts. Young growers, especially, need marketing security to make payments on debts, have sufficient income for family expenses, and have capital for expanding their businesses. Some growers use cash contracts or futures contracts to cover only direct costs of production or storage. They speculate on the rest of their crop.