Menu

Focus on the Market and Marketing Your 2015 Crops

It was fun to experience the high commodity market prices of the past few years. Those higher than normal prices do not seem to be part of the current or nearby futures market as production numbers have changed. In very high market price situations, everyone can price their corn and soybeans for a good profit. We had a couple years where it seemed if you did little or no marketing and just waited until you needed some cash you were rewarded with a good profit. However, 2014 and the first half of 2015 have shown farm producers commodity prices that have been near or even below what some farms may need to cover all production costs and provide a breakeven return.

Every farm has their own breakeven price and we can spend lots of time discussing the different ways to calculate the cost of production. What matters most is the amount of revenue that your farm needs to cover all annual expenses that include debt payments and family living. As we now move the crop toward harvest every farm should have an estimate of that gross income needed for 2015. For most of the state, farms are comfortable with the progress and condition of the crops and now are focused on estimating the yields for the 2015 growing season. The next step is to estimate the revenue each of the various commodities or products the farm produces will generate for the farm. Using a spreadsheet or other tool to estimate the farm’s total cost estimates along with the farms estimated total potential revenues is a great first step in developing a marketing plan. This gives the farm management team some targets of prices that can be considered as profitable and make it easier for the farm to book sales using one or more commodity marketing alternatives to set a price.

Marketing the crops that you produce is a year-round job or at least it should be as the end goal of producing any commodity is to sell it profitably. Some farm producers may only consider the marketing alternatives for a crop that has been harvested and in the bin or delivered to the elevator. This takes away about half of the marketing period and alternatives.

After several months of grain prices drifting lower and lower during the first half of the year, locking in current prices are a better situation than were available a few months ago. Any rally in commodity prices should be considered a selling opportunity. As the saying goes; “what goes up, will also come down”. Early sales can be a great tool for a farm to avoid a major down turn in commodity prices that could create a negative financial situation for your farm, which we all want to avoid if possible.

Locking in current prices for the 2015 crop may not end up being the best game in town, but to have some of your crop priced at a profit is a positive defense if the markets turn lower. You can find a monthly commodity outlook report developed by Jim Hilker, Commodity Marketing Specialist, Michigan State University Extension on the webpage as a quick reference along with several other commodity marketing links.

While the development of a marketing plan may not be as much fun as the production side it is vital to the overall success to the farm business.

Source: Dennis Stein, Michigan State University 

Recent News

Expect High-moisture Corn at Harvest
10/11/2019

A killing frost is expected within a few days in North Dakota, which will end corn development. According to the U.S. Department of Agriculture’s National Agricultural Statistics Service, 84% of corn in North Dakota had reached full dent on Oct. 6, which likely will result in corn with a test weight of 50 to 53 […]

Consider Toxicity Issues When Fall Grazing
10/9/2019

With forage production abundant in most areas of North Dakota, producers may be using options to extend the grazing season, including stockpiled pasture, hay regrowth and warm- or cool-season annuals. “It is important to consider grazing management and potential plant and animal health implications when evaluating options for fall grazing,” cautions Janna Block, Extension livestock […]

Managing Corn Harvest this Fall with Variable Corn Conditions
10/8/2019

Thanks to the weather we had this year, corn is variable across fields and in some areas we will be harvesting corn at higher moistures than normal. Stalk quality may also be variable by field and amount of stress the plant was under, see the article Stalk Quality Concerns in this weeks CORN Newsletter. This […]

Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now