TOP FARMER WEEKLY PERSPECTIVE 11/12/2021 BY BRYAN DOHERTY

TKM: Time, Knowledge, and Discipline.

When it comes to marketing, it takes certain efforts and practices to maintain a long-term consistent approach to take advantage of opportunities and shift risk. We believe the cornerstones of successful marketing are dedicating time, building your knowledge base, and practicing discipline to execute. In this Perspective, we’ll take a brief look at each of the cornerstones and how you may incorporate them in your marketing.

Let’s start with time. Successful marketers take the time to monitor the markets on a consistent basis. Monitoring markets is basically keeping yourself informed of fundamental and technical developments and recognizing the effects in market prices. As a producer of a commodity, you also have the responsibility of being a marketer. Grain producers sell annually, sometimes executing multiple sales within a year. Often, successful marketers are looking for advantages (chart reversals or other signals) that may identify when a market may be peaking, or perhaps just starting to show strength. Regardless, we believe taking the time to stay in tune and on top of developments is key. Time will also tie into the other cornerstones of knowledge and discipline. Knowledge comes through the investment of time to learn marketing alternatives and having the right conversations with the right people.

Knowledge is understanding how and when to use the appropriate marketing tools. Knowledge is also knowing who to communicate with and, perhaps most importantly, what questions to ask so you can make decisions to help attain your goals. Growing your knowledge takes time and it also takes discipline. Investing 30 minutes a year in a conversation with the elevator manager probably isn’t enough. Good marketers will maintain a consistent rhythm of communication throughout the year with all the people in their management circle. Very specific strategies should be well explained at the time you’re considering executing. Professional advisors can help you do this. As a producer, you’re not expected to be a marketing expert, and it may be advantageous to have a relationship with one. They can make complex strategies straightforward and simple so that, when you execute, it all makes sense.  You will have a clear expectation of the risks and advantages of each strategy. They will also be able to revisit the reasons you incorporated certain strategies. You have many responsibilities. Remembering why you did a strategy 6 months ago may have been lost in the shuffle of literally hundreds or thousands of decisions you have made since then. A great advisor will help you to maintain the how and why.

The third cornerstone is discipline. It is not unusual to visit with farmers who have an immense amount of knowledge and spend a significant amount of time learning and understanding. Still, these same farmers often fail to execute. Marketing becomes one-sided. Perhaps they’ve decided what they should do, and end up storing and selling when cash is needed.  They lack the discipline to pull the trigger and, more importantly, after pulling the trigger they don’t have the discipline to revisit their strategy and plan for the next strategy. Marketing is often a series of decisions throughout the course of a year. The discipline to stay on task and on track is critical. Marketing on a part-time basis likely provides part-time results. Of course, there is always the story of the neighbor that did nothing and fared well. These stories are often shared. The stories that aren’t shared are the undisciplined marketers who do not stay informed and ultimately end up selling a significant portion of their crop at lower prices, often after significant dollars are tied up into storage and or opportunity cost.

Farming practices are always changing and always will. New technologies, equipment, and new practices to help you achieve the pinnacle of your profession. Those who spend time and energy building their knowledge, monitoring the markets, talking to the right people, and then executing may find that, over time, they gravitate near the top end of their peers.

If you have questions or comments, please feel free to contact Bryan Doherty with Total Farm Marketing at 800-334-9779.

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.

Author

Bryan Doherty