If you want excitement, go to Las Vegas. If you want to make money on your crop production, have a plan and stick to it. It’s that simple, says Scott Stewart of Stewart Peterson. However, getting the discipline to do that isn’t always as simple.
"It basically means, look forward and consider where the market might go. The high odds one and the low odds one, and then lay out strategies for all of those and layer those strategies. It’s how to manage a marketing position on the entire crop to average a high average price and high average return for the producer."
Stewart’s marketing approach takes into account planning not only for up and down moves, but also how fast the market is moving in either direction. "You need to look two or three layers out and looking at the different positions you’d use. If the market is going up very rapidly, you might use an options strategy. If it’s moving very slowly, you may use a futures or a cash sale to get the job done. It’s all about teaching producers how to use the right tools at the right time to get the kind of leverage they need to market their whole crop and get a high average price."
Getting there is not always that easy, he says. That is why having a plan in place can help producers set a disciplined plan to take the emotion out of their marketing decisions. "If you want to manage your farm more professionally, you have to take a professional approach to your marketing. That means you have to step up and do it in a very systematic way."