Agricultural Market Risk Management

Protect your margins, not just your prices

In hog production, profitability depends on several markets that evolve simultaneously: the selling price of hogs, the cost of purchasing piglets, corn, soybean meal and the Canadian-American exchange rate. 

Agrintel assists producers in analyzing these risks and preparing hedging strategies adapted to their volumes, maturities, margin objectives and financial capacity. 

Using its Aggregate Pork approach, Agrintel examines the combined effects of these markets on feed cost margin, rather than considering each price in isolation. Its proprietary algorithm supports hedging decisions, in addition to personalized advice..

At Agrintel, agricultural market risk management is an integrated and structured approach that combines analysis, strategy, and hands-on support.

Our objective is to help producers understand, measure and manage market risks to support more informed decisions about their operations. Hedging can reduce exposure to price fluctuations, but it does not eliminate risk or guarantee profitability.

Our approach does not seek to predict prices, but rather to propose structured market positions that are consistent with real market conditions.

Through the Agrintel algorithm, each operation benefits from a decision-making framework grounded in economic logic and disciplined hedging. The tool identifies optimal timing and volumes for action, while respecting each producer’s financial tolerance and profitability objectives.

Agrintel’s approach to agricultural market risk management is built on rigor, transparency, and education. It connects data to judgment, strategy to action, and theory to on-the-ground realities.

The six components of our risk management services

1 – Exposure and market analysis
2 – Economic modeling and margin simulations
3 – Hedging strategies and aggregate-based approach
4 – Ongoing monitoring and dynamic adjustments
5 – Advisory support and training
6 – Accountability and transparency

 Turning volatility into rational decisions

Analysis

Define your personalized risk profile

We assess the risk factors that influence margins – including input prices, commodity prices, currencies, and correlations – to define a risk profile tailored to each operation.

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Modeling

Anticipate periods of vulnerability

Using the Agrintel algorithm, we model costs and simulate different scenarios to anticipate periods of vulnerability and identify zones of financial stability.

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Hedging strategies

Benefit from an aggregate-based approach

We design hedging strategies tailored to the realities of each farm by combining outputs, inputs, and currencies.

The aggregate-based approach provides integrated margin protection.

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Dynamic adjustment

Benefit from continuously updated analysis

Our market analyses support regular reviews of hedging decisions as conditions evolve. Recommendations take into account the producer’s objectives and financial capacity.

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Support

Training to help you make the most of your tools

Each producer receives tailored support within an economic intelligence framework, including a minimum of eight hours of annual training to fully understand and use the decision-making tools.

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Reporting

Measure your results with full transparency

Detailed weekly, monthly, and annual reports outline positions, margins, and overall performance, ensuring complete and measurable transparency.

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FAQ

Futures contracts allow agricultural producers to reduce their exposure to fluctuations in the prices of certain commodities and inputs. 

In pork production, Agrintel assists producers in managing several market risks: the selling price of hogs, the cost of corn, the cost of soybean meal and variations in the Canadian-American exchange rate. The cost of purchasing piglets is also included in the overall margin analysis. 

Hedging is intended to reduce uncertainty about future revenues and costs. However, it does not eliminate all risks and does not guarantee the profitability of the operation. 

A favourable selling price does not guarantee a satisfactory margin. An increase in the price of pork may, for example, be offset by an increase in the cost of feed or an unfavourable change in the exchange rate. 

Agrintel therefore favours an integrated approach, called Pork Aggregate, which takes into account sales revenues, the cost of piglets, corn, soybean meal and the exchange rate. 

These components are expressed on a common basis, in Canadian dollars per 100 kg of pork produced, to track their combined effect on the feed cost margin. 

This margin does not correspond to the total profit of the farm: other production costs must also be considered. 

There is no percentage of coverage that is suitable for all agricultural businesses. 

According to Agrintel, the level of coverage depends on three factors: the producer’s risk tolerance, the company’s financial capacity to withstand margin calls, and knowledge of its production costs and feed cost margin. 

It is also necessary to determine the volumes actually exposed. For example, a pig producer who grows his own corn must take into account his expected production and the consumption of his herd. Covering the entire crop without considering this consumption could lead to inadequate coverage. 

Agrintel recommends assessing the level of coverage based on margin targets, market conditions and the specific situation of each operation. 

Futures contracts can lead to margin calls when prices move unfavourably relative to the positions held. These calls require liquidity, sometimes at short notice, even if the hedging strategy remains economically relevant. 

Before taking a position, the producer must therefore assess his ability to finance margin calls without compromising the other financial obligations of his operation. 

Agrintel points out that a company with insufficient liquidity could be forced to liquidate its positions prematurely, reducing the effectiveness of its hedging. 

The need for liquidity should be assessed according to the volumes covered, the instruments used, the possible market movements and the length of time the company can fund its positions. 

Protect your margins, secure your future

Because we come from the field, we understand the realities producers face. Our goal is to protect your margins and strengthen the future of your farm.

  • A clear view of your current situation
  • Independent recommendations
  • Concrete actions to improve the profitability and sustainability of your farm

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