Ask an Analyst: Dan Hueber | The Hueber Report
What is your commodity marketing philosophy?
At the core of it is having good information. So often, producers love the production side of the business. When it comes to marketing, it’s more like, “This price sounds like a good area.” The better the information, the better equipped you are to make decisions on what are profitable levels and how to put together a disciplined approach to marketing.
What distinguishes your consulting firm from others?
We are less price-centric than some. Your revenue should really be the factor that drives decisions.
What’s one action every producer should take to manage commodity marketing risk?
One is develop a good relationship with someone you trust. When working with an adviser, the adviser needs to understand your risk profile and what tools could be available. Second, continue to increase your knowledge base. Raise your marketing IQ so you have the proper tool for the proper job when the time arises.
What percentage sold should farmers be on their crops?
Generally, we like to be 50% or 60% sold on new-crop corn and soybeans by late September. This year, we’re not. We haven’t had a market that offered great opportunities without moving to exotic instruments. This has left us with few flat price opportunities. For now, all we can try is to capitalize on spreads and basis changes.
Which marketing tool is most underappreciated?
Basis. Basis levels in many areas move anywhere from 30¢ to 50¢ a year. We don’t necessarily recognize that or feel that. From 10% to 15% of the value of your commodity in any given year is left out there to guess, and too few producers take advantage of it.
Who is one expert in our industry whose business advice you respect greatly?
Some of my mentors who were gone long before I started my career are W.D. Gann and R.N. Elliott. Both were of the philosophy that commodities offer a truer representation of global health and market opportunities, as they reflect things that we literally cannot live without.
What activities do you enjoy?
My free time is spent with my wife, three children and five grandchildren. It’s hard to find something more enjoyable.
Policy Update with Mike Adams
Time Has Come For Agriculture Secretary Sonny Perdue To Step Up
Since being confirmed as secretary of agriculture, Sonny Perdue has been on a nationwide goodwill tour. He continues to get high marks from farmers and ranchers and certainly seems to be the right person for the job. He is a likeable, calming presence in an administration that is constantly swirling in controversy.
It’s hard not to like a guy who shakes your hand, says the right things and loves kids, pets and ice cream. Plus, unlike his boss, he even knows how to use Twitter in a good way. Let’s face it: Sonny Perdue is the ultimate goodwill ambassador.
But at some point, he’ll have to be more than just a good old boy to keep the ag community happy. Style will only take you so far and eventually, he will need to show some substance. We have seen glimpses, but more will be needed.
As President Donald Trump publicly attacks trade deals and pushes budget cuts harmful to agriculture, we’ll see how much influence Secretary Perdue has with his boss. Getting USDA fully staffed will be a big help, as farmers need Perdue to be more than just a good public image. —Mike Adams