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Ideas For Young Farmers: Developing a Path to Success

In the world of commodity marketing, achieving consistent success is a challenge, particularly for farmers just beginning their careers. This struggle stems from a combination of factors, including a lack of marketing prowess or the misperception of one's marketing abilities. However, young farmers who are nimble in their approach to their markets may be best positioned to enhance their marketing skills and achieve long-term success.

Understanding and Beating the Market Average

One fundamental idea involves closely monitoring average crop prices within your locality. This simple yet effective approach entails recording the weekly closing prices at your local elevator or directly from your farm bin, comparing your average selling price against this benchmark at the end of each marketing year. Surpassing the average price consistently not only validates your marketing acumen but also sets a foundation for continuous improvement. This method offers a realistic measure of performance, steering away from the unrealistic expectations of always hitting the market's peak prices.

The Power of Incremental Selling

Adopting incremental selling is another pragmatic approach to market success. Selling crops in approximately 20% increments throughout the marketing year, especially during seasonal rallies, allows for a more balanced and less volatile revenue stream. This strategy leverages market highs, mitigates the impact of lows, and even accommodates bearish market trends, such as the ones most crops are locked in today. Incremental selling reduces the pressure of timing the market perfectly, offering a flexible and stress-minimized approach to commodity sales.

“For young farmers aiming for long-term prosperity, these two strategies may sound basic but are rarely implemented consistently”, commented Ranulf Glanville, an analyst with GrainFox.

By focusing on beating the average price and embracing incremental selling, farmers can navigate the complexities of commodity markets with more confidence. The journey to marketing success is not about the occasional windfall but rather the steady accumulation of profitable sales over time.

Glanville added, "Embracing these principles early on can pave the way for increased success with your marketing results over time. It can also help to cope with the stress of weak markets and unrealistic expectations created by embellished coffeeshop talk about how other farmers are doing. That's not something that is measured in dollars and cents but is also extremely valuable!"

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The Investment Opportunities of Industrial Hemp

Video: The Investment Opportunities of Industrial Hemp

The fledgling U.S. hemp industry is decades behind countries like Canada, France and China, but according to impact investor and this week’s podcast guest, Pierre Berard, it could flourish into a $2.2 billion industry by 2030 and create thousands of jobs.

To reach its potential, what the hemp industry needs most right now, Berard said, is capital investment.

Last month, Berard published a report titled “Seeing the U.S. Industrial Hemp Opportunity — A Pioneering Venture for Investors and Corporations Driven by Environmental, Social and Financial Concerns” in which he lays out the case for investment.

It’s as if Berard, with this report, is waving a giant flag, trying to attract the eyes of investors, saying, “Look over here. Look at all this opportunity.”

Berard likens the burgeoning American hemp industry to a developing country.

“There is no capital. People don’t want to finance. This is too risky. And I was like, OK, this sounds like something for me,” he said.

As an impact investor who manages funds specializing in agro-processing companies, Berard now has his sights set on the U.S. hemp industry, which he believes has great economic value as well as social and environmental benefits.

He spent many years developing investment in the agriculture infrastructure of developing countries in Latin America and Africa, and said the hemp industry feels similar.

“It is very nascent and it is a very fragmented sector. You have pioneers and trailblazers inventing or reinventing the field after 80 years of prohibition,” he said. “So I feel very familiar with this context.”

On this week’s hemp podcast, Berard talks about the report and the opportunities available to investors in the feed, fiber and food sectors of the hemp industry.

Building an industry around an agricultural commodity takes time, he said. According to the report, “The soybean industry took about 50 years to become firmly established, from the first USDA imports in 1898 to the U.S. being the top worldwide producer in the 1950s.”

Berard has a plan to accelerate the growth of the hemp industry and sees a four-pillar approach to attract investment.

First, he said, the foundation of the industry is the relationship between farmers and processors at the local level.

Second, he said the industry needs what he calls a “federating body” that will represent it, foster markets and innovations, and reduce risk for its members and investors.

The third pillar is “collaboration with corporations that aim to secure or diversify their supply chains with sustainable products and enhance their ESG credentials. This will be key to funding the industry and creating markets,” he said.

The fourth pillar is investment. Lots of it. Over $1.6 billion over seven years. This money will come from government, corporations, individual investors, and philanthropic donors.

The 75-page report goes into detail about the hemp industry, its environmental and social impact, and the opportunities available to investors.

Read the report here: Seeing the U.S. Industrial Hemp Opportunity

Also on this episode, we check in with hemp and bison farmer Herb Grove from Brush Mountain Bison in Centre County, PA, where he grew 50 acres of hemp grain. We’ll hear about harvest and dry down and crushing the seed for oil and cake.