Marketing Plan Critical to Profit Increases This Year
By Theresa Seiler
The countdown is on. Once we turn the calendar to start a new year, my husband gives me— and anyone else who will listen— a daily report of how long it will be before planting begins. Bruce does this because he loves farming and he is always planning ahead.
Although there is always work to be done on the farm, the winter gives us time to evaluate last year’s performance and to plan for the coming year. Part of that planning must include how you will market the crops that you produce. Every farming operation needs a written marketing plan.
Things to consider in your marketing plan are: expected production, delivery location and time, crop insurance levels and cash flow needs. Putting your plan in writing forces you to actually think about it. It also gives you a reference to consult as the marketing year progresses. And since it is yours, you can adjust the plan as needed.
Last year at this time, grain prices were at least $0.90 lower on new-crop corn and nearly $5 lower on old-crop soybeans. Other grain prices were within that range, but all were lower than the current market. Prices continued lower until late August. Since then, the markets have rallied nicely.
The current market will allow us to price grain at profitable levels, and the projected harvest price for crop insurance is shaping up to give us a good pricing floor. I started selling 2021 grain for my producers when prices began to recover. I have continued to make sales as the market moves higher. I’m still selling old-crop grain and grain for this year. However, I’m starting to make offers for 2022 grain as well. If the market continues to move up, I’ll make larger sales at higher prices. If the market moves down, I plan to have enough grain sold so I can wait to make more sales until it recovers.
If you didn’t take advantage of the recent cold snap that affected most of the nation, it’s not too late to work on your marketing plan now. Contact your National Farmers Crop Insurance agent and marketing representatives. We are here to help.
Whatever you do, don’t watch the market go up, just so you can watch it go back down.