The plan's goal is to achieve a price in the top third of the market trading range. A minimum service charge applies, and producers pay an additional performance premium if the team maximizes farm-customer returns by reaching the top third market goal. This choice guarantees farmers a minimum of the average futures price during a set period, plus two-thirds of any amount by which Cargill AgHorizons hedging activities exceed that average. A service charge applies. Farmers receive the average futures price during a set period, typically the highest seasonal period.
Participants also agree to a maximum futures price, creating a price cap.
No service charges or performance premiums apply. Brock will utilize futures and options strategies with the goal of reaching a price in the top third of the futures trading range. A service charge applies, and producers pay an additional performance premium if Brock maximizes customer returns by achieving a price within the top third. Kluis will use a slightly more conservative hedging strategy while also trying to reach the upper third of the trading range. Like the Brock and Cargill AgHorizons choices, a service charge and additional performance premium for achieving the top-third price apply.