Producers have many tools available when it comes to protecting profit margins. Depending on the type of contracting one chooses, it may be true that you are “locking in” to a fixed price level for either your input costs or your sales revenue. Other tools may allow you to protect a price level without limiting your ability to participate in more favorable prices. In this way, your profitability is not necessarily capped, although there is a cost associated with maintaining that flexibility. For more on strategy descriptions, please reference Core Strategies under Tutorials.
