TOP FARMER INTELLIGENCE – Weekly Perspective by Bryan Doherty
As 2019 comes to a close, most farmers would probably agree this past year had its challenges. In some cases, they were extraordinary and overwhelming. Yet, 2019 may end on a good note. We like the progress with trade agreements. Recently the USMCA was passed by congress and (hopefully) soon will be signed by the Senate. The Phase One agreement with China could be a launching pad for agriculture, as business with China could be on the rise, perhaps significantly. Cattle and milk prices gained considerable strength throughout the fourth quarter. A strong economy and stock market could provide additional underlying support for commodity prices.
In the year ahead, expectations for a rebound in row crop production has many producers optimistic for bigger crops. With more supply, chances increase for lower prices. Marketing will again be paramount in 2020, and likely the difference between profits or losses. The world’s ability to quickly ramp up production after weather events suggests producers will need a sharp marketing pencil. Set marketing goals, be vigilant for pricing opportunities, and use the right tools that will work for you.
Like any business, a farming operation has multiple facets to keep you busy and worried at just about all times. Marketing can’t be an afterthought. Marketing decisions are never easy. Start with a well-planned approach that defines target/sell points. Consider coverage of positions through the use of options to manage risk. Farming, by definition, is a risky business. Farmers embrace this risk knowing they won’t always succeed, and know that if they do things right, the odds, over time, favor success. Marketing has to be part of “doing it right.” Take time over the holidays to outline a well-planned approach for the year ahead. Talk with the people in your management circle who can help you achieve your goals. Have conversations with your market advisor so you are using the right tools at the right time for marketing success.
If you have questions on cash marketing strategies or would like ideas for your operation, contact Top Farmer at 1-800-TOP-FARMER extension 129. Ask for Bryan Doherty.
Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results.