Matt Bennett always knew he was coming home to farm in Windsor, Ill., but while in college he discovered he had another calling.
“One of my professors at the University of Illinois — Dr. Darrell Good — he told me I really needed to do something involved with the markets since I’ve always had a good general knowledge of it.”
Bennett’s ability to study the markets and share his analysis grew into his own brokerage business. Today he’s co-owner of AgMarket.Net and says wearing both hats gives him a unique perspective.
“Whenever you’re actively involved in farming you understand that typically we’re not real cash-heavy, folks,” Bennett says. “Asset rich/cash poor is the adage. Knowing that definitely changes your perception of what you need to be doing from a marketing standpoint, how to protect yourself, how to manage risk and it certainly has served me well in that we all need to defend our profit margins.”
Bennett realizes marketing is hard, especially in today’s environment because its emotional.
“But bottom line is if I know my cost of production, then I know where I need to step in and manage risk, especially if I benchmark against some years from the past,” he says. “And so, we have to know our finances like the back of our hand, because we are a business.”
Bennett is transparent about what he’s doing for marketing on his own farm and doesn’t recommend a strategy he wouldn’t use himself.
The same is true for Indiana farmer Chuck Shelby who also owns Risk Management Commodities near Lafayette, Ind.
“What we tell our clients to do is what I do on our farm,” he says.
The markets have changed substantially since Shelby started in the business, especially the volatility and the factors that influence the market beyond fundamentals.
“In the last several years there have been so many outside factors, such as the war, fund money and inflation,” he says. “At the end of the day, the fundamentals really are the driving factor, but we’ve got a lot of components that move markets significantly. That makes it even more challenging to figure out what’s the right answer.”
Shelby understands the influence the fund and algorithm traders have on the commodity markets can be discouraging for farmers.
“It’s it is part of the world today we farmers have to market in,” he says.
Both Bennett and Shelby say if they had to pick one profession farming would always win, but they’re thankful they get to combine their two passions to help others in agriculture.
