Marketing 101: HTA is Not a Four-Letter Word

HTA troubles

Many HTAs enable growers to roll the contracts into a more distant delivery period, for a fee, if basis levels are poor or there is a problem with delivery.

Multi-year rolling burned many growers and elevators in 1995-1997. A drought caused corn to hit $5, nearly unheard of back then. Growers booked multi years of production through HTAs. Then the market plunged, putting huge obligations on grain handlers and growers. State and federal lawsuits erupted. Some went to prison.

“That debacle caused HTAs to get a bad name,” Brees says. “Some elevators now give them different names, such as ‘no-basis-established (NBE)’ or ‘futures-only’ contracts.

“However, HTAs can be good marketing tools. It’s just important that growers have crop insurance in place in the event they can’t make enough of a crop to cover the contracted bushels required for delivery.”

For more on HTAs and other marketing tools, check with your Extension crop marketing specialists or your local grain buyers.