Uncertainty Abounds; Take Control
Nov 11, 2009
As the frustrations of this year’s harvest grow, I just wanted to express my appreciation for the long hours you’re going through and all the uncertainties you are facing. We’re talking with producers who say they’ve never seen a harvest like this in 30 years of farming.
I wish you continued perseverance and safety as you work through these weeks.
Lately, trying to predict what your week ahead will be like is difficult, I’m sure, because you can’t be sure what the weather will do. You can rant and rave about it, but that won’t bring a single bean or kernel in any sooner. So you take control of your emotions and plan for contingencies. If it rains, I’ll calculate my drying costs and maintain the equipment. If it’s dry I’m taking off the north 80 acres first. And so on. Contingency planning helps you maintain some level of control, despite uncertainties.
When harvest is done, think about applying the same process to your marketing. Predicting the markets, like predicting the weather, is frustrating. So don’t make this the focus of your marketing. Instead, take the approach many businesses take: scenario planning.
Our firm applies the business management practice of scenario planning to the commodity markets. We do this because we, despite our best efforts, cannot accurately predict where the market is going. No one can. And if you wait until you develop a consensus of opinions on where the market is going, you almost always miss the move.
So, we analyze the market and develop all the possible scenarios for what the market might do. Then we develop a set of strategies and trigger points for each scenario. No matter what the market does, we know what we’re going to do. Bring it on. We’re ready.
The more structured, disciplined and strategic you can make your marketing, the less uncertainty you will have. Good decision-making principles kick in, old habits are kicked out, and frustration is minimized.
I wish there was a way to eliminate uncertainties from harvest, because I know it would make these days a bit easier right now for every farmer.
When it comes to marketing, remember that uncertainty is what creates opportunities. Capturing opportunity requires strategic thinking and disciplined decision-making in your marketing. Scenario planning is one way to minimize the uneasy feelings that come with uncertainty, so you can take control of your farm marketing.
More on Market Scenario Planningsm in my future posts. Best wishes.
Scott Stewart is president and CEO of Stewart-Peterson, a commodity marketing consulting firm based in West Bend, Wis. You may reach Scott at 800-334-9779, email him at firstname.lastname@example.org.