The Most Effective & Simple Grain Origination Strategy There Is

The typical grain marketing discussion that occurs with a farmer at the elevator or coffee shop centers a lot around price. 

            What are prices doing?  Where are they going?  Why is the market doing what it’s doing?

You can talk hours about the subject but, in the end, trying to predict or make sense of price is futile.  No one has the crystal ball.  Though farmers tend to bring up the discussion of price, what they are really asking for is help with their grain marketing.

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The idea of the “Profit Talk” is to take the discussion with the farmer to a different place… one that results in a more meaningful and productive grain origination conversation.  This is done by emphasizing “profit” rather than price.  When you speak in terms of profit there are tangible things to talk about.  You can calculate costs, estimate yields, set a profit goal.  These are all good discussions that focus the farmer on things of substance:

“To make $100 an acre I need to sell at $4.00/bushel.”

“To make a 20% return on investment I need to net a price of $4.20.”

“If I can make a net profit of $150/acre every year, I’ll have the farm paid off in 10 years.”

“Today’s price of $3.40 is a loss of $50/acre.”

Again, these are meaningful and worthwhile observations.  If $3.40 isn’t profitable, what is?  What do you need to make your business work?

A really good question to ask is … “What are you farming for?”  Is it to have a set amount of income upon retirement?  Pay for your kid’s college?  Pay off the farm in 10 years?  A goal oriented marketing program is much more successful than one that is based on chasing an elusive price.

Committing your grain business and your grain origination team to the “Profit Talk” takes your relationship with the customer to a higher level.  It puts you in partnership with the customer.  You want and need him to be profitable … you are not adversaries but two businesses working toward the same goals.

Creating a culture focused on the “Profit Talk” also enables you to involve people in all sectors of your organization.  The grain buyer, bookkeeper, agronomy people, truck drivers, outside labor, all can contribute in some way to delivering your company’s grain origination message of profit-based marketing.

So, keep in mind:  The one thing your competition can’t take away from you is the relationship your people have with your customers.  A relationship built on the “Profit Talk” can be a significant and meaningful point of difference for your organization.

Topics: Grain Origination