“Don’t get scared into a marketing decision”

by | Aug 28, 2019 | 5 Ag Stories, News

Watching grain markets fluctuate can be rather discouraging.

A commodity analyst shares how to react to this situation.

AUDIO: Matt Bennett, Channel? Seed grain marketing consultant

Matt Bennett, co-founder of Ag Market, also serves as a grain marketing consultant for Channel? Seed. Bennett, speaking at the 2019 Farm Progress Show, says, ?Liquidity is going to be an issue again this year.? He encourages producers to approach the situation at hand with a business-based marketing plan.

“Whenever it comes to marketing, I want to approach it with a business-based plan. I don?t want to get caught up in the emotions of it. I want to have a marketing plan going into the year, have sell orders in,? Bennett said. ?For instance – Right now we?re telling guys and gals, if you want to sell corn at $4.10 or $4.20, based upon a frost or freeze event, have an offer in now because the bottom-line is just the scare of a frost or freeze could produce a good rally, but it might not stick around long.?

While he understands producers are concerned about profit margins, he adds this bit to help ease their minds.

Bennett says it is time to ?quit beating yourself up for missing the market,? as the many emotions surrounding these volatile markets are enough to ?drive you mad.? The analyst believes producers would be best served by not worrying about the grain markets and calculating a good selling point.

?Don?t get scared into a marketing decision. What you want to do is get a good idea of what your yields are going to be. You already know your cost of production, as far as costs are concerned. Take an agronomist with you, if you want, and figure out what you think a base yield is going to be. Then you?ll know a breakeven price,? Bennett said.

Bennett speaks to where producers found profitability within the past marketing year, and stresses the importance of making sound marketing decisions rather than falling victim to fear.

?If your breakeven price is $3.70 a bushel and you can get $3.50 today, wait, because this is a long marketing year. I?d like to remind people: People, for 2018, who got the most for their corn sold in the summer of 2019,? Bennett said. ?I?m not saying that?s going to happen again, but it goes to show you there?s no sense in making an unprofitable move before you?ve even harvested a kernel, if you can avoid doing so.?