ORIGINALLY WRITTEN BRADLEY GOERING
Loss of appetite, restlessness, anxiety and impatience can be common symptoms for career farmers. For the sake of this article, we’ll refer to it as market anxiety.
Marketing is one of the toughest decisions a farmer deals with every year. As always, farmers try to sell their crops at the highest level and often times get the bottom third.
In the most recent years, loan deficiency payments (LDP) have changed our perspective of marketing. However, low prices, the LDP, and other factors should signal a greater, more active marketing plan to realize a profit from a crop.
Watching the markets and seeing the basis-the difference between local cash price and the futures price-narrow is a signal that your crop is wanted. Therefore, that may be the time to lock in a price for your crop.
The downside may be it will prevent a producer from hitting the big home runs. On the flip side, it can assure the farmer can be profitable for that crop during the year.
For the average person, the situation is comparable to investing for retirement.
How much risk are you willing to take each year? Some years you get the big returns and other years you lose big. Last year was a good example of losing big in the stock market. When you develop a strategy to offset the big losses in the down years, you can still come out ahead.
For farmers, knowing your expenses and understanding your living expenses should help determine your marketing plan.
By developing a plan and working toward the goals established on paper, you can reduce some of the emotion out of marketing decisions.
Another key is the decisions a farmer makes-not necessarily the advice he or she receives.
Farmers can find advice 24 hours a day in our technological world. How and when to take action is what’s important.
If you’ve lagged behind in this area, work on educating yourself this year.
A final note: Research still shows the most profitable farms are technologically advanced and produce the highest yields.
Bradley Goering can be reached by e-mail at firstname.lastname@example.org, or by telephone at 620-327-4941.