Some habits breed grain marketing success, while others hurt your profitability. Want to be a better marketer? Follow this advice from Joe Vaclavik, president of Standard Grain and host of the “Grain Market and Other Stuff” podcast, and Angie Setzer, vice president of grain for Citizens Elevator and author of “The Business of Farming” blog.
Develop a Written Marketing Plan. Without a plan, you can fall victim to the “chicken in the yard mentality,” says Setzer. With each new bit of information, you flock to a different direction and change priorities. “That pattern does now allow for a cohesive plan, you are just chasing opportunities and not following a long-lasting plan.”
Know Your Numbers. “Your numbers are the most important grain marketing tool you have as a farmer,” Vaclavik says. You need specific and up-to-date cost of production information for your farm.
By knowing your cost structure gives you a level of comfort when booking inputs and making market decisions, Setzer adds. “It also provides an ability to make the deferred sales and profit levels providing long term peace of mind,” she says.
Scale your sales. “No one will ever nail the high of the market with anything but luck,” Setzer says. “I’d rather have luck than skill but let’s be honest, it helps to start with skill and get a little bit of luck.” She suggests selling small percentages of your crop once prices reach profitable levels. Then continue to sell as the market moves higher.
Forget Old Sales. If you are always looking back at former grain sales and agonizing over them, it can blur your vision of future sales, Vaclavik says. “A good sale is not one that you make and then the price goes lower,” he says. “A good sale is a sale that makes money. Don’t beat yourself over bad sales. Everyone makes bad sales.”
Assess Your Personality. Emotions and your personality influence your marketing decisions, Setzer says. “Take time to learn about yourself,” she says. “Learning about yourself, learning about your decision making and what drives it can help you be a successful marketer. Don’t be afraid to make necessary changes to improve where you may be lacking in skills or understanding.”
Simplify, Simplify. “A lot of grain marketing is way too complicated,” Vaclavik says. “There are all sorts of option spreads, synthetic contracts, accumulators, etc. There are places for those, but they are often not necessary. You could simply use hedge-to-arrive basis contracts and do just as well as the guys using really complicated tools.”
Take Time Away. Purposely take time away from grain marketing, Vaclavik and Setzer suggest. Find something away from the farm that brings you joy. “You’ll find clearing a lot of that clutter from your mind will provide you with an amazing sense of clarity,” Setzer says.
Read more coverage of the Top Producer Summit.
Watch Top Producer Summit presentations from Setzer and Vaclavik:
The Grain Marketing Behaviors that Breed Success (And the Ones that Don’t) by Angie Setzer
Grain Marketing Mistakes You Can Avoid by Joe Vaclavik
Read more coverage and watch other sessions from Top Producer Summit.
