Contingency plans, as part of the basic marketing plan, will also help. What to do if the price doesn't reach the desired level and what to do if the crop is not as large as expected are important contingency actions when the market does not develop according to your general expectations. Marketing Tools Learning about the full range of price risk management tools will allow you to become a better marketer and risk manager. Selecting the right tool to use at the right time will not only reduce risk, it could increase your profit. Following are a basic overview of more commonly used pricing strategies and guidelines for determining when to use each.
Storage is a way if avoiding seasonally low prices.
When prices are below the level anticipated in the marketing plan, storage may be justified, assuming that you have adequate financial resources. Storage may be warrented when there is a realistic expectation of a market price increase. Historical data indicate that the market is often willing to pay your storage costs. However, stored grain can go out of condition and is subject to theft. When prices are favorable and at levels anticipated in the marketing plan, direct cash sale is warrented.