One of the options available to both livestock and crop producers is the ability to sell their products, and thereby establish a price, well in advance of the delivery of the final product. While this is can be done directly with futures contracts, many if not most producers do it through their packer or grain elevator using what is commonly referred to as forward contracting.
Historically, crop contracts on the Chicago Board of Trade have allowed forward pricing a few years ahead of delivery. For instance, you can price corn in the low $5 a bushel range today out as far as 2010. Livestock contracts have always had a shorter pricing horizon usually a little less than one year to about a year in advance.
