Even as commodity prices soar - extreme volatility in commodity markets have made challenging financial and risk management decisions even more difficult for farmers. That’s according to the American Farm Bureau Federation. And on Thursday - Farm Bureau President Bob Stallman shared that with lawmakers serving on the House Ag Subcommittee on General Farm Commodities and Risk Management- cautioning that because of a lack of convergence - farmers could find themselves exposed to more risk as time goes on.

According to Stallman - the role of speculative and commodity-index-related trading in agricultural futures markets is also contributing to market uncertainty - reaching historic levels. The futures market mechanism - he says - is bent at this point in time. And with major grain and oilseed marketers only offering firm crop-price bids 60 days into the future - Stallman says the breaking point may not be far away.

Stallman told subcommittee members that farmers are challenged with developing and implementing risk management programs for their crops. He says the problem is compounded by rising input costs - as producers feel pressure to lock in what they will pay for inputs before knowing how their crops will fare and the prices they’ll receive at harvest. Some farmers - he says - are pre-paying for inputs they won’t utilize until the next crop year - resulting in the uncomfortable position of locking in future input costs without the same opportunities in future crop prices.