Comment by didgetmaster
Comment by didgetmaster 10 hours ago
Crops are a commodity where you can't instantly ramp up or down the supply to meet demand. Most require the better part of a year from seed to harvest. If it grows on trees, it can take years before they produce.
Forecasting crop output can also be tricky. Weather conditions, pests, or other things can lead to failed crops or bumper crops.
The life of a farmer can literally and figuratively be 'feast or famine'.
My grandfather was a farmer in the 70s-80s, and he used futures on about 50% of his crop every year. Just enough to make sure a bad year can't wipe out the farm.