With harvest season here, it’s time to check in on your grain-marketing plan and determine the next steps for your farm. Whether you store or sell, there are numerous ways to generate a profitable outcome.
“One of the most important tips to remember is that prices are variable,” says Alan Brugler of Brugler Marketing and Management in Nebraska and Missouri. “Regardless of the levels of supply and demand, the markets will move. Don’t fall into the trap of thinking that just because we are in a surplus we are stuck with low prices. Each year, there are more opportunities.”
Construct Strategies. The variability of this year’s corn and soybean crops can make it especially difficult to know when to sell. By developing a marketing plan that includes sound strategies and consultation with specialists, you can make smart sales.
Grain marketing comes with highs and lows. Know the goals you want to accomplish to set your operation apart from others.
“Having a good business plan makes all the difference,” says DuWayne Bosse with Bolt Marketing based in South Dakota. “When you make a plan, put it on paper and review it once a week. Make sure it still makes sense, and stick to it. Do not sit back and say you are going to sell at the high.”
Include targets in your marketing plan to ensure you are considering yield goals and break-even prices. If you have grain bins in place, you have added dexterity, though storage isn’t a sure path to profitability.
“Lately, it has been a little difficult to earn returns on storage because the basis has been extremely flexible,” Brugler points out.
Consult A Specialist. For some producers, it makes sense to rely on elevators and other local professionals. For others, hiring brokers or grain-marketing consultants is best.
“Hiring a consultant helps counteract backyard-itis, or the tendency to project what you are seeing at your farm or in your county and think that the whole U.S. is experiencing the same thing,” Brugler says. “Talking to an adviser who has clients in multiple states is a way to help you gain perspective on what is actually driving prices.”
Consultants bring perspective, connections, technical analysis and knowledge about supply and demand. They also provide critical guidance about when it is time to pull the trigger and sell.
“The best producers are ones who stick to their marketing plan and use consultants or brokers to remind them of the game plan,” Bosse says. “Many producers can sell their own grain and deal with elevators or ethanol plants, but what they need is a little nudge from brokers who are sitting here watching the marketing all day long to tell them, ‘Hey, remember that marketing plan we made? We are up to that level. Let’s go ahead and sell some.’”
Fall 2017 Forecast. This year, an overriding concern is that the U.S. has plenty of supply for corn, soybeans and wheat coming into fall, and there are fairly large overhanging supplies from Brazil and Argentina, Brugler explains. “As the fall moves forward, deliver all the forward contracts you took on, watch for a fall low to lift hedges, and sit tight and wait for a postharvest rally tied to an issue in South America.”
Brugler’s expectations for total corn yield is 168 bu. per acre for the U.S. This is down from 2016 production levels but very close to the trend line. Bosse estimates a national yield of 166 bu. per acre, which is farther below USDA’s September projections.