- Cash crops are agricultural products such as grains, vegetables, or fruits grown in bulk with the intention that it will be sold by the planter
- Corn is the most popular cash crop in the world, with more than 350,000 contracts entered or existed per day on average
Agriculture is an essential part of civilization. Wherever agriculture is possible, humans came together, paving the way for the development of societies. Eventually, agriculture evolved and became more than just for supplying human needs. Excess products were eventually traded and used to earn profits. Over time, lands have been dedicated for the cultivation of crops for sale.
Cash crops are agricultural products such as grains, vegetables, fruits, or another type of plant that is grown in bulk with the intention that it will be sold or exported by the planter. Cash crops are distinguished from ‘subsistence crops’, which are grown for the purpose of self-supply by the planter. Cash crops can typically be traded globally with prices negotiated on exchanges such as the Chicago Board of Trade (CBOT) and Intercontinental Exchange (ICE) in the US, and the Tokyo Commodity Exchange (TOCOM) in Asia. As such, cash crops are influenced by global market prices.
Examples of typical crops include rice, wheat, oats, corn, soybeans, potatoes, palm kernel, oilseeds (e.g., rapeseed, sunflower), tea, coffee, cocoa, sugar cane, sugar beet, avocado, and oranges, and orange juice. Cash crops are generally food products but can be non-food products too, such as cotton, tobacco, and rubber.
Corn is the most popular cash crop in the world, with more than 350,000 contracts entered or existed per day on average. A typically corn contract is for 5,000 bushels of corn (or ~125 tones). The amount of a crop being traded changes depending on the crop. Thus, a contract sizes for other popular tradable crops, coffee, oranges and cocoa, is 37,500 pounds (or 250 bags), 15,000 pounds, and 10,000 pounds, respectively.
