Hedging is another tool that enables producers to secure their incomes for the year. For example, it can cover their grain purchases and pork sales. They have a margin.
A problem arises when a producer works on contract. For example, when the price is $1.70 and the market forces it up to $1.80, the producer has to pay the difference. The producer doesn't necessarily have the funds to cover that difference. When he sells a product, he covers his margin and repays his guarantees from his pork sales. Backing the margin entails no risk.
The Advanced Payments Program has been beneficial for producers, who have very much appreciated it. That's something we acknowledge.
However, the established time periods assume that producers will have adequate margins enabling them to repay. Producers want to repay, but they want acceptable conditions so they can repay the Advanced Payments Program.
Grain prices have increased in the past year and a half, as have pork prices. It is reported in the newspapers that the price of pork is higher than ever, which is true. However, grain prices are also at their highest. Producers therefore don't have the necessary margin enabling them to repay.
The program is in existence and they have to start repaying on April 1. For some producers, that will be fine, but others are very concerned. I know what producers want. They need the guarantees on those loans to be more personal guarantees because this very much affects the producers.