First, if you have any unpriced old-crop grain, Ben Brown, agricultural economist at the University of Missouri, says to focus on basis bids.
“Based on no carry in the market, nothing signals we should be holding onto 2022 grain,” he says. “Basis is the name of the game this spring.”
So, shift your focus to your 2023 crop. Brown expects crop insurance guarantees for this year will be similar to 2022. Once you know those and have penciled in your production costs, set price targets. For your corn and soybean crops, Brown provides this advice:
- Set a minimum sell price based on your cost of production and set a realistic high price.
- Estimate how many bushels would be 70% of your average production.
- In April, May and June, make seven sales (70% of production divided by 10) when prices are within your price range.
- On July 1, price any remaining portions of that 70%.
- For the remaining 30% of your grain, develop a postharvest marketing plan.
“Sometimes we have nothing left at harvest,” Brown says. “But at least it gives us the opportunity to have an extra buffer if we do. I like this strategy because it gives us both date and price signals. Human nature is to do nothing, but that means you can end up with three years of corn on your farm. This strategy makes you proactive.”
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