Grain Marketing

by Joe | Published October 25, 2016

The old adage is “Good things to come to those who wait” has a lot of truth to it.  But when it comes to grain marketing, delaying needed decisions can be very costly.

All options of post-harvest marketing come with costs.  Costs can include storage fees, interest costs, option premiums and an added risk of paying these costs and accepting a still lower price at a later point. A better option is to use the period before harvest to forward contract.

Often times, there is a chance or several chances to forward contract grain during the growing season at a profitable level.  Producers need to be cautious in their marketing, but also have a solid plan nailed down.

Knowing the cost of production is important.  Adding the needed profit to the cost of production should give a good number to sell grain. Using target offers let producers decide ahead of time what prices they are willing to forward contract.  Doing this can help remove some of the emotion from grain marketing.

Another old saying is “You can’t go broke making a profit”.  This mostly eliminates the impossibility of selling at the high point of the market, but sets realistic goals for forward pricing. Using a proactive marketing plan helps to eliminate some of the stress from this part of the management system!

Keep the marketing plan simple.  Sell at a profit and avoid paying extra fees or taking unnecessary risk.

Also posted in Uncategorized
  • Categories