In the Intro to Grain Marketing webinar we covered the key concepts of crop marketing and discussed why you should be spending more time on your marketing strategy. See what questions other growers asked during the webinar and our answers.
Q: Why did you choose to divide production into sets of 20% each?
A: We did this to show an example of how you could diversify your production, and how you could apply that same break down to your production. We’d recommend to have at least sets of 25% for your marketable units, that way you are marketing your grain using 4 different strategies.
Q: Should you use last year’s cost per acre when calculating what to do this year, since all costs may not be incurred until late in the growing season?
A: In general, last year’s costs are a good start to establishing a plan. Similarly, this year’s costs are a good start for planning for next year. Our new planner tool, available this fall, will enable you to track costs as they occur by field / crop which will give you a better view in ‘real-time’ actuals against a budget.
Q: How long should I hold my grain for prices to improve?
A: It depends on your cash flow needs. If you are holding grain and you need the cash, and the market is at or above your target price, you should sell. If cash flow is not an immediate need, then you may consider holding your grain until the following spring when historically, prices are at a high. Also, if you are paying to store your grain off farm, that cost per bushel to store is impacting your price, so make sure to consider that when you are weighing the cost to sell or store off-farm.
Q: Do you have data on average basis by region, state, county, etc across the last few years? Alternatively where can this data be found?
A: Unfortunately, there's not one place to get a comprehensive view of historical basis by state, region, and county. We recommend looking for this data through industry experts or local extension offices.
Q: I don’t know my total expected bushels yet, what should I use to calculate target price per bushel?
A: It’s best to use a conservative yield number, so that may be your actual production history, average yield over a certain time frame, or your lowest yield. FarmLogs Marketing is a great tool for calcuating your target price per bushel.
Visit FarmLogs Crop Marketing Education page to learn more about grain marketing!