Use the New Year as Reason to Sharpen Marketing Skills

 What’s happened…

If you are a grain farmer, monitoring prices has been like watching paint dry over the last several months.

A year ago, strong cash markets were suggesting you actively manage cash prices due to historically high price inversions. This year is different – lower prices, bigger supplies, and carry are reflected in futures prices. The market is telling you to store your crops, the opposite of last year when the market was telling you that it wanted your crops.

Why this is important…

A sideways price pattern can lull even the best marketers into a mindset of complacency. Yet, every day is a new day and a new opportunity. Sometimes it takes searching and (frankly) a lot of work to find opportunities. Sitting back and waiting to see what happens could be fruitful or disastrous, an approach that may have extreme results. There are ways to avoid extreme results.

What can you do?

With the start of a new year upon us, consider using this as an opportunity for a fresh start to build good marketing habits. Develop strategies to manage stored 2023 production as well as seek out opportunities for the 2024 and even 2025 crops.

Good marketing habits are derived from within. There is not a one-size-fits-all formula. However, there are some common themes this author has experienced over the years from working with farmers for well over three decades.

Time dedicated to marketing ranks high on the list. Schedule time to keep up to date with market news and trends. Attention to world developments, including crops in the Southern Hemisphere, may be just as important as communication with your local buyers. Price charts can be helpful in determining potential support and resistance areas to set sell targets. Carving out time dedicated just to marketing is a trait that many find helpful.

Knowledge is also a key element to marketing. In fact, time and knowledge are intertwined. Make it a practice to learn something new. Since you wear many hats, recognize that, as a manager of your product, it is important to keep up to date with the multitude of marketing alternatives you may have available. Are there new markets? Are there new managers at elevators to build relationships? Are you well versed in your knowledge of marketing tools, whether cash or paper? Recognizing changing landscapes may require the use of different marketing tools. A rapid rise in interest rates also has more impact on decision-making, something many farmers have not had to consider in recent years. Stay open-minded and sharpen your pencil, as pennies count in a low-price environment.

Discipline is more than pulling the trigger when you know you should be making a sale. Yes, emotion can come into play. Common sense suggests that, if you wait for higher prices and they come, it is only natural to second guess and wait for the rally to continue before making a sale. Think of discipline in a manner of creating a consistent environment where you are dedicating time to stay knowledgeable and current with marketing opportunities, as well as communicating with those that can help you achieve your goals.

Make it a habit to connect with your advisor and develop strategies, using tools that are best suited to you in any market move. Be open to changing the strategy as the market environment changes. Be on the offensive. If you don’t want extremes, then connecting with a professional regularly and developing strategies may be a great way to prepare and execute without hesitation. A balanced approach that incorporates cash sales with fixed-risk re-ownership tools can shift risk and keep you long the market, giving you the ability to participate in price rallies.

Each year is different. In the long run, developing an approach to marketing suited to your situation may be just as paramount to your operation as selecting the right seed or fertilizer application. Details matter. Take the start of the new year as an opportunity to reflect, learn, and modify your future actions to maximize your best efforts in achieving your goals.

About the Author: With the wisdom of 30 years at Total Farm Marketing and a following across the Grain Belt, Bryan Doherty is deeply passionate about his clients, their success, and long-term, fruitful relationships. As a senior market advisor and vice president of brokerage solutions, Doherty lives and breathes farm marketing. He has an in-depth understanding of the tools and markets, listens, and communicates with intent and clarity to ensure clients are comfortable with the decisions.

The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Individuals acting on this information are responsible for their own actions. Commodity trading may not be suitable for all recipients of this report. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  Examples of seasonal price moves or extreme market conditions are not meant to imply that such moves or conditions are common occurrences or likely to occur. Futures prices have already factored in the seasonal aspects of supply and demand. No representation is being made that scenario planning, strategy or discipline will guarantee success or profits. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing. Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services, LLC is an insurance agency and an equal opportunity provider. Stewart-Peterson Inc. is a publishing company. A customer may have relationships with all three companies. SP Risk Services LLC and Stewart-Peterson Inc. are wholly owned by Stewart-Peterson Group Inc. unless otherwise noted, services referenced are services of Stewart-Peterson Group Inc. Presented for solicitation.

Author

Bryan Doherty