Managing risk through market volatility

Global economic drivers like the war in Ukraine and inflation continue to push volatility in commodity markets.

As the hustle and bustle of harvest time approaches, Tim Andriesen, Managing Director of Ag Products with the CME Group tells Brownfield farmers need to keep a close eye on the markets and have a risk management plan.

“Options make a lot of sense in a marketplace like this. You can either sell production and buy a call option or you can just buy a put option. Either one locks in a price for you, but if the price goes up it allows you to participate.”

He says the volatility doesn’t appear to be easing up anytime soon so, “If I were a producer, as I saw pricing opportunities, I would certainly be thinking about one way or another locking in the price. Find a good broker, find a good marketing advisor, work with somebody who understands the tools.”

Brownfield interviewed Andriesen at the 2022 Illinois State Fair.

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