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Farms plant seeds, which costs some amount of money. They then wait for a harvest, at which point they hope that the sale price of that harvest covers their exp
by antasvara 3y ago
Farms plant seeds, which costs some amount of money. They then wait for a harvest, at which point they hope that the sale price of that harvest covers their expenses. How is that not speculation on the price of a given crop?
- jmyeet 3y agoPlanting seeds to grow crops is an example of creating value, not speculating. If the crop price remains unchanged, the farmer is fine (generally). Often the risk of price movements over the season are hedged with futures as well. Speculating would be needing the price to go up to turn a profit or not selling your crop in the hopes that the prices increases in the future.