Farmers will soon be entering fields, and keep busy for a few months.
A market strategist highly encourages producers to create a marketing plan before spring.
Brian Grossman, market strategist with Zaner Ag Hedge, says now is a good time to put together a grain marketing plan. Grossman encourages farmers to map out a plan after going over operating renewals.
“At any given time of the year, there’s always the possibility of a surprise, which could change your expenses. Not having a plan is going to make those surprises much more complicated,” Grossman said. “Get through operating renewal, and then get working with either a market strategist or someone who has experience to guide you. Look at what kind of tools are available.”
Grossman says producers must first take their break even point into consideration.
“You need to know how much you’re spending on a per bushel basis. That is definitely a great starting point,” Grossman said. “You also have to keep a little bit of realism in it. A lot of people are still holding out for $4.40 corn. That number sounds great, and it could be in the cards, but to what level of realistic is it? Do you want your entire plan based on a high hope number? Or have a more structured plan, that at some point, could keep you in the game if the market continues, but still protect the main thing – the bottom line of your farm?”
Grossman advises producers to “stop looking at grain markets.” He suggests it will “drive you nuts” and distract from your primary goal: solidifying a grain marketing plan before spring.
“If you are selling at a price that you are comfortable with today, write that down. Write down why you want to make that sale at this level. Is it because it’s good enough or because you know you can make a profit?,” Grossman asks. “Put down your reason because you’re not going to second guess yourself if you can go back and re-experience that emotion.”