Prepare Your Grain Marketing Plan

Posted: March 27, 2015

Extension Farm Marketing Specialist John Berry believes that no one on earth can predict the future. Unfortunately, that is what it takes to make effective marketing and risk management decisions. Here are some common tenets considered significant for grain marketing.

Knowing your specific cost-of-production allows a view of current markets with an eye-on-potential profitable price opportunities. The pre-harvest season (now through early June) has historically been identified as a prime pricing window. Prices are influenced by supply & demand but the market does not care. Storage has a cost and family living costs are likely higher than last year. A famous business quote goes something like “the function of a market is to drive the average producer out of business.” Your plan should prevent you from being driven out of business!

Hopefully we have learned a few new things this winter about cutting edge grain production tools and techniques. We may have even learned something new about marketing and price risk management tools. At least we are more confident in our skills and practices as effective business managers.

Watching the South American soybean harvest news Berry is asking farmers to consider their exposure to any unpriced 2014 & 2015 soybeans. Also, anticipating 2015 crops prices Berry is awaiting market news resulting from the March 31st USDA planting intentions report at the end of this month. The world watches for this significant piece of market insight. We have all heard various reports from various sources on how many acres of which crops will get planted for the 2015 growing season. However unreliable this USDA report is – it is the officially recognized first-best guess on how many acres (read SUPPLY) the U.S. will have through the coming marketing months.

(Contributed by Leon J. Ressler, District 17 Director as part of his Now Is The Time Column for March 28, 2015.)