Delayed Pricing (DP), Explained

What delayed pricing is

Delayed pricing (DP, sometimes called "price later") is an arrangement where you deliver grain to an elevator now but set the sale price later. The elevator takes the bushels — and usually title to them — and you keep the right to price at any point before the contract's end date.

It solves a real harvest problem: the combine doesn't wait for a good price, and your bins may be full. DP moves the grain off your trucks without forcing you to accept the harvest bid.

What it costs

Elevators charge a DP fee — commonly a flat per-bushel charge up front, an ongoing per-bushel-per-month charge, or both. Terms vary a lot between elevators and between years, so read the sheet, not the rumor. Compare the fee against commercial storage rates and against what the market's carry is actually paying (see futures spreads) before deciding DP is the cheap option.

The risk farmers underestimate

The big one: on most DP contracts, title to the grain transfers to the elevator at delivery. Until you price, you're typically an unsecured creditor of that elevator — if it fails, your DP bushels generally don't have the same protections that warehouse-receipted grain in storage does (protections vary by state). Thousands of farmers have learned this distinction the hard way over the decades.

Second, DP is still an unpriced position. Delivering the grain can feel like you "did something," but your revenue is exactly as exposed to a falling market as it was in the bin. A DP ticket is a decision to stay long — make it on purpose, not by default.

When DP makes sense

• Harvest logistics demand the grain move and your storage is full
• You have a reason to expect basis or futures to improve, and the fee is less than the improvement you're targeting
• You've compared it against storage, a basis contract, or simply selling and re-owning on paper

Whatever the choice, track the position: unpriced DP bushels belong in the same marketing math as unpriced bin bushels.