Pro Farmer editor and Ultimate Farm Quest marketing expert Chip Flory (left) and Michigan farmer Leon Knirk analyzed each aspect of Knirk’s farm to develop the right market strategy for his farm operation.

Understanding the relationship between cash and futures prices is critical to picking the right tools and developing an overall market strategy.

Successful marketing is a little like calling the offensive plays in a football game: Some plays fit a particular situation better than others, and no single play works well every time.

The same is true for sound marketing strategies, according to Chip Flory, Pro Farmer newsletter editor and Ultimate Farm Quest marketing expert.

“The biggest misstep that most farmers make is using the same marketing tool every time they sell,” Flory says. “You can’t do the same thing over and over and expect to improve.”

Leon Knirk says that was his No. 1 challenge to overcome.

“I was doing OK with marketing, but I knew I needed to improve,” says Knirk, a diversified grain and livestock farmer from Quincy, Mich., and a Farm Journal Ultimate Farm Quest program participant.

The Ultimate Farm Quest program is designed to help farmers reach a higher level of success—with marketing as one of its cornerstones. Flory is Knirk’s adviser.

At the start of the program last spring, Flory asked Knirk to take inventory of each revenue-generating enterprise on his farm—his 2,000-acre grain operation and his family’s 500-head feedlot. The result is Knirk now knows how much money he invests in each enterprise and the amount of income that each generates.

Based on that information, Flory helped Knirk establish two marketing goals, both of which have already impacted the family’s third-generation farm operation.

First, Flory asked Knirk to develop a better understanding of basis and basis trends for his area. Second, Knirk set a goal to maximize total revenue per acre for the farm.

“That seems like an obvious goal, but some long-standing and relatively conservative marketing plans don’t maximize revenue,” Flory says.

Flory says Knirk historically relied on a scale-up marketing strategy when selling grain to keep financial risks in balance as prices moved higher. Using that strategy meant Knirk also made multiple, relatively small-scale sales at different prices as prices rose.

Flory recommended that Knirk try a different approach that he believes will be more effective for 2011.

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