Time To Finalize Your Grain Marketing Plan

Oct 05, 2015

Now that grain is being harvested and starting to go in the bin, it is time for producers to finalize their grain marketing plan.

“Farmers often go through numerous hats in a year,” says Todd Bergen-Henengouwen, market analyst, ag inputs, Alberta Agriculture and Forestry (AF), Edmonton. “Quite literally this might be true, but figuratively it also holds. Farmers need to be mechanics, veterinarians, meteorologist, farmers, and marketers. Growing a crop is only half the battle, marketing the crop is the other.”

Marketing includes

setting financial goals of where you would like to sell your grain
exploring price and delivery alternatives
seeking market opportunities to ensure you are receiving the best available value for your commodity

“Good marketing takes planning, selling discipline, access to good market information and a good understanding of pricing and delivery alternatives,” says Bergen-Henengouwen. “It is easy to get greedy when the market rallies. A good marketer knows that they won’t always hit the peak of the market and knows when to pull the trigger on a deal.”

Keys to marketing are to:

know your cost of production
spread sales over a 12-14 month period
avoid pricing during heavy delivery points
gather information from various marketing sources, such as commodity futures brokers, cash grain brokers, local buyers etc.
know your product and know what you have in the bin

“There are numerous types of contracts and delivery options available to producers to use,” says Bergen-Henengouwen. “It’s important to look at all options and decide which way is the best way to market your crop. It’s also important to understand the mechanics of how the contract is executed to ensure informed decision making. “

Source : Agriculture and Forestry

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