December 1 , 2006
The current volatility in agriculture markets is increasing the importance of knowing when to use futures and options, said a leading expert in the industry.
"With all the volatility that we're seeing in the grain and livestock markets now, it is important that producers control their risk," said Alan Brugler, president of Brugler Marketing and Management in Omaha, Neb.
Brugler will conduct an Advanced Futures and Options seminar in December under the Advanced Topic Series. Advanced Topic Series is a part of the Master Marketer Education System offered by Texas Cooperative Extension.
The seminar will be held Dec. 18-19 at the Texas A&M University System Agricultural Research and Extension Center in Amarillo. The cost is $125 for the two-day session and covers materials, breaks and lunches. Pre-registration is required one week prior to the course date. The course runs from 9 a.m. to 4 p.m. daily. Registration forms can be found online at http://mastermarketer.tamu.edu .
"Using a hedging program or futures only can tie up a lot of capital in margin calls," Brugler said. "Not using a hedging program at all can result in a lot of lost profit opportunities.
"The use of the option strategy makes the risk to the producer one directional," he said. "The producer is able to pass on the risk and still take advantage of price movements that are favorable."
During the seminar, Brugler will discuss advanced hedging techniques and futures and options strategies, such as covered calls, spreads, storage hedging and windows. Time will be spent on the pros and cons, and when these strategies are appropriate.
For more information, contact Dr. Steve Amosson at 806-677-5600 or your local county Extension agent.