Sometimes farmers need a trusted adviser to grab them by the shoulders and yank them out of the fog of the markets.
“My wife is a reality person and shakes me out of that,” explains Jeff Bruene, a producer who raises corn, soybeans, alfalfa and stocker cows in Gladbrook, Iowa. “One time, I had soybeans in a bin and [prices] rallied up. ‘What are you waiting for? This is a good price,’” he recalls her saying. “I got $16 per bushel.”
That ongoing need for clear-minded direction about commodity marketing has led the two to attend meetings of the Tri-County Marketing Club in Conrad for the past six years. Organized by Iowa State University Extension, the meetings are a combination of marketing education from experts and learning from fellow farmers.
As tight margins continue into 2016, producers, Extension specialists and market advisers say these kinds of gatherings—organized by Extension and private marketing firms alike—are beneficial so that producers learn about available tools, talk strategy with fellow farmers and, in the case of top operators, learn to question grain merchandisers.
“It’s not about breakeven once you store the bushels unpriced; it’s about trying to create a positive margin above your cost of ownership,” explains Iowa State farm management specialist Steven Johnson, who helped start the club in 2000 and remains a regular speaker at its events as well as those of two other active clubs in the state. “That’s a different thought process.”
Groups Gain Momentum. For producer Alan Volker of Tarkio, Mo., the need for sound marketing counsel prompted him to ask his marketing analyst, Alan Brugler of Brugler Marketing & Management, for guidance. Brugler went on to form Ag Marketing Strategy Groups.
“We start at 7 p.m., usually with the educational piece first,” explains Brugler, president of the firm. He meets 11 times annually in person with a group in Missouri and another in Nebraska. Farmers also participate in monthly webinars. “Then I go into the corn, soybeans, wheat and cattle outlook. There are fundamental, technical and proprietary things we do. It’s very interactive, and farmers ask questions.”
At a December strategy group meeting in the northwestern Missouri town of Rock Port, Brugler met with Volker and other producers to discuss those outlooks. One farmer joked he’d only come to hear that corn is going to $4.50.
“You might as well go home,” another quipped, prompting members to burst into laughter.
Brugler presented an educational session on Argentina’s new president and possible export increases as tariffs are lifted, as well as changes to the Renewable Fuels Standard. He made the case that Argentina’s situation will have a greater impact on the price U.S. farmers receive for grain as farmers make old-crop sales and potentially switch acreage from soybeans to corn.
Volker came with his brother’s stepson, Zane Holmes. Volker, Holmes and two of Volker’s brothers farm together. Members often bring the next generation to meetings.
“Zane understands bar charts, but he needs to understand more supply and demand information,” he says. “He’s learning. Hopefully that will make him a better marketer if he has his own operation down the road.”
Cecil Demott (right), a producer from Rock Port, Mo., attends monthly marketing meetings. He’s a student of technical tools such as Bollinger Bands.
About half of the Rock Port club members also subscribe to Brugler’s Ag Market Professionals advisory service. The other half attend as a monthly marketing checkpoint. All pay annual dues of $450. Dues for the Iowa State clubs typically average $10 per person per meeting.
Members stay connected outside of meetings. “Four or five have decided to put together 1 million bushels of corn and sell them to a big elevator as a group deal to get a big basis push,” Brugler says.
Ivan Woltemath and his son, Mike, farm near Hamburg, Iowa, and drive south each month for Brugler’s meetings. Ivan acknowledges many farmers think that marketing is dull and that they’re too busy to learn. Yet those who take the time will reap the benefits.
“You are the boss,” Mike explains. “You are the one who needs to pull that marketing trigger.”
In Person And Online. Both Brugler’s groups and the Extension groups can continue learning about marketing online.
“Some months I’ll go to the meeting, and then I’ll turn around and listen to the webinar to make sure I didn’t miss anything,” explains Cecil Demott, a corn-and-soybean producer from Rock Port, who has attended Brugler’s meetings since 2004. He has benefited from learning about tools such as Bollinger Bands, which measure volatility around a moving average, and Stochastic RSI, which can help assess whether commodities are overbought or oversold.
“If you want to stay in business and you want to be in the top third of the selling range, I think you’ve got to understand what’s going on in the market,” Demott says.
Diligent study should give producers an edge at a time when marketing skills matter more than ever.
How To Make The Most Of A Grain Marketing Club
Meet Face To Face And Online. Most marketing clubs have in-person and online educational components. Participate in both settings to learn as much as possible, share ideas and look ahead.
Think About The Bottom Line. One of the primary purposes of attending a club is to benefit your bottom line. Take notes on tools and strategies that give you better margin control and generate profitability above breakeven or the cost of ownership for stored bushels.
Ask A Lot Of Questions. These meetings aren’t for bashful people. Participants gather to learn, so understand where your weaknesses lie and ask questions of expert speakers and fellow farmers who can help improve your business.
Find Compelling Speakers. The quality of the presenter matters a lot. Find a club where organizers and guest speakers are consistently sharing good information in an engaging way. “It does make the meeting go better, and I think you pay closer attention without falling asleep,” Pierce jokes.
Build Networks With Peers. Actual business partnerships can form from connections made in marketing groups. Look for producers with similar goals or needs and find ways to market crops together or strategize.