While it’s tempting to think that crop prices have plateaued, producers should realize that betting on that assumption is extremely risky, experts tell the U.S. Farm Report Market Roundtable.
"I believe that the American farmer is looking at the November bean chart and the December corn chart, and this big drop that we’ve had in the market, and saying, ‘Well, it can’t go any lower,’" says Mark Gold, Top Third Ag Marketing, during a taping at the 2014 Top Producer Seminar. "But when you look at the 30-year charts, you realize that there’s still considerable risk out there that you need to be protecting today."
Statistics for corn alone indicate there are 6 billion bushels being held in bins, Gold notes, a sign that producers are behind on marketing.
"One of the things you have to accept when you’re looking at marketing opportunities is sometimes you have to at least get a floor underneath the market to give yourself a position to start from," explains Brian Basting, Advance Trading. "That’s the thing that we’re emphasizing with 2014. When you get a floor established, you leave yourself the option to benefit if the market goes higher, but you’re also protected if the market grinds lower. This market can continue to go lower. When you look at what’s transpired in the last six months, you’ve learned that."
Even as the U.S. Senate appears on the verge of approving a new farm bill that includes crop insurance, producers should realize that crop insurance is just a part of the marketing equation.
"Crop insurance is a great brick in building your support base for your marketing and your farm operation, but the biggest advent that crop insurance should allow you to do in especially this environment is when we get rallies, you need to be a better marketer," says Bryan Doherty, Stewart-Peterson. "They’ll come."
Click the play button below to watch the complete Market Roundtable report, including a discussion of the livestock industry:
Thank you to the 2014 Top Producer Seminar sponsors:
Premier Sponsors: Agrigold, Apache Sprayers, BASF, Bayer CropScience, Cargill, Case IH, Challenger, Dow AgroSciences, DuPont Pioneer, ESN, Firestone, Koch Agronomic Services, RCIS, SFP, Syngenta, Top Third Ag Marketing
Co-Sponsors: Advance Trading, CliftonLarsonAllen, The Gulke Group, Kennedy and Coe, Michelin, Novozymes, OPI Integris, Soybean Premiums, Wyffels Hybrids