"You need to treat farming as a business, not a lifestyle." This is our founder's quote of choice when speaking with farmers. Our business, Crop-Side grain marketing, is based on tested ideas that are easy to follow and take the emotions and guess work out of it. The following are the five pillars we base our strategy on, and believe you should too.
1) Know Your Cost of Production & Break-Even Price
No estimates allowed. You want cold hard facts about how much everything costs. Keep accurate and organized documentation so recalling or checking your figures is easy. Seed, fertilizer, machinery, etc.; Each broken down into its own separate category. Your costs will determine your break-even price, which you'll carry in your pocket everywhere you go as a mindful marketer. Without these, you're driving with your eyes closed.
2) Know Your Desired Profit Goal
Have your reasonable goal, worst case income, and a higher figure in mind. Depending on what happens throughout the marketing year, you'll want to be prepared for anything. Your worst case income will show you were to possibly put an option price floor. On the other hand, the greatest enemy of a good plan is a perfect plan. Hence, taking outstanding profits as part of a plan is superb, given the opportunity. Either way, this is your income, not funny money at the casino.
3) Sell In Small Increments
With all the volatility in the market today, farmers have lots of opportunities to sell. With small sales, you are thinking like a trader. The best Chicago traders know how to position themselves. They might not be right all the time, but they know value and small trades keep their emotions under control. Cash marketing is all about getting the best AVERAGE price, not hitting the longest home run.
4) Document Sales Continuously
All these sales require solid record keeping too. Farmers must always know their position in the market. How much you sold, your average price so far, basis levels, and delivery periods are all important. Together, these things allow you to track your profits vs. your goal scenario. And remember, the purpose of making a plan, is to follow your plan.
5) Have A Marketing Service
Being a farmer is time consuming. So much so that all the information and decisions lead to many missed pricing opportunities. Having a marketing service to lean on when you're unsure or overwhelmed can be life changing. Try to find one that meets the following criteria:
No estimates allowed. You want cold hard facts about how much everything costs. Keep accurate and organized documentation so recalling or checking your figures is easy. Seed, fertilizer, machinery, etc.; Each broken down into its own separate category. Your costs will determine your break-even price, which you'll carry in your pocket everywhere you go as a mindful marketer. Without these, you're driving with your eyes closed.
2) Know Your Desired Profit Goal
Have your reasonable goal, worst case income, and a higher figure in mind. Depending on what happens throughout the marketing year, you'll want to be prepared for anything. Your worst case income will show you were to possibly put an option price floor. On the other hand, the greatest enemy of a good plan is a perfect plan. Hence, taking outstanding profits as part of a plan is superb, given the opportunity. Either way, this is your income, not funny money at the casino.
3) Sell In Small Increments
With all the volatility in the market today, farmers have lots of opportunities to sell. With small sales, you are thinking like a trader. The best Chicago traders know how to position themselves. They might not be right all the time, but they know value and small trades keep their emotions under control. Cash marketing is all about getting the best AVERAGE price, not hitting the longest home run.
4) Document Sales Continuously
All these sales require solid record keeping too. Farmers must always know their position in the market. How much you sold, your average price so far, basis levels, and delivery periods are all important. Together, these things allow you to track your profits vs. your goal scenario. And remember, the purpose of making a plan, is to follow your plan.
5) Have A Marketing Service
Being a farmer is time consuming. So much so that all the information and decisions lead to many missed pricing opportunities. Having a marketing service to lean on when you're unsure or overwhelmed can be life changing. Try to find one that meets the following criteria:
-They don't buy your grain
-Watches the charts and price movements daily
-Aware of speculative funds and historical data
-Passionate about being great Marketers
-Knows Farming
-Watches the charts and price movements daily
-Aware of speculative funds and historical data
-Passionate about being great Marketers
-Knows Farming
Conclusion
Although grain prices may swing without regard, your farm profits don't have to. The purpose of a sound marketing plan is to produce consistent returns, and the above steps are proven to do so. If you're still looking for a sound marketing service, Crop-Side Marketing can help.
Although grain prices may swing without regard, your farm profits don't have to. The purpose of a sound marketing plan is to produce consistent returns, and the above steps are proven to do so. If you're still looking for a sound marketing service, Crop-Side Marketing can help.