In the last blog we discussed the comparison of planting corn versus soybeans. Profit opportunities vary greatly from one operation to the next. Some operations may benefit from all corn, while others have more profit opportunity in soybeans. Regardless of your acre mix, the next challenge is achieving an acceptable market price. Most producers have very little sold at this point, especially compared to last year.
Now that the spring workload has increased, it's easy to change your focus from marketing to production. Be sure to set aside some time to structure your spring/summer pricing goals. It's likely we'll see some volatility in the coming months.
Pricing opportunities often come when we are distracted with other tasks i.e. planting, spraying, and managing the crops. Sometimes these pricing opportunities can come and go in the blink of an eye. If you're not able to constantly watch the markets, it's critical to either have someone watching this for you or place some offers to sell the grain.
Assuming you have your acres plan set for 2012; you can now determine your approximate total production. Consider some of the following questions. What percentage do I have sold currently for each crop? What is my average selling price? How many bushels per acre do I currently have sold for each crop? At what price level would I be willing to price another 10% sale for each crop?
Once you answer these questions, it will allow you to begin your plan for the next several sales.
No one truly knows for sure what direction the markets will go during the course of this growing season. On the other hand, you can determine what price levels are acceptable, achievable, and appropriate to manage your risk and profitability. Pricing opportunities may come and go rapidly this year, make sure you have your goals set and your offers in place.
Be sure to use a tracking device which clearly identifies your marketing positions. This allows you to specifically manage your decisions with accuracy, confidence, and discipline.
Here is an example tool for keeping track of your marketing and/or pricing offers.
If you'd like a copy of this "Market Tracking" tool, feel free to send me a request.