Inflation could hurt organic and non-GMO demand
A market analyst is concerned inflation will hurt demand for non-GMO and organic crops.
David Hightower of the Hightower Report says in a surging price environment, premiums can quickly become cost prohibitive.
“And on the other end of the spectrum, when you have very low pricing, then paying a slight premium at low overall prices gives the non-GMO and organic (farmers) a significant opportunity to garner market share.”
He tells Brownfield organic and conventional marketing plans need to be aggressive in the face of inflation.
“Buy futures again. I know it’s a hedge, but buying multiple puts against that position and if the market rallies, the futures will give you your money back on the puts that you spend. And if we roll over, you’ll have an exponential benefit on the downside.”
Hightower recommends that strategy because he says it allows farmers to recoup the amount of the put premiums.