Wait and see. I’d bet dollars to donuts that if you’re in the business of merchandising grain for a living, you’ve heard this refrain (or something similar) since last harvest. Wait and see. I submit that while our producers may be saying this, what they’re actually communicating is that the weight of their situation is dragging them to the bottom of the sea (metaphorically only, I hope)! No, prices aren’t all that great today and nobody is likely to sell any old or new crop grain right now, but why let the situation dictate the course of your origination program or the farm marketing plan?
The fact of the matter is that we are entering the time of year when, historically, we see price improvement. Two things, time and a lack of provable information, can and should be used to our advantage right now. Our current reality is that we don’t have a good grip on the reality of harvest 2015. Any hiccup due to trade, politics, or weather is an opportunity to market grain. We have to be prepared when such events occur, because there is absolutely no way to know how long these movements may last or how often they will occur. Market exposure in the form of firm target offers is the only way to take control of such situations when they take place. CIC (Call If Close) orders won’t cut it in this environment. Use the tools available to get to the producer’s bottom line: set a goal and put the order on autopilot. Opportunity will happen, but it doesn’t have to happen for long. If some of our customers are having a difficult time at making a decision when prices are stagnantly unattractive, how will they react when/if prices rally due to a drought scare this summer? Will they then be able to make that call, or will the emotional pendulum swing the other way?
History proves that prices, on average, tend to drop from spring to fall as more details become known about the crop; a period of time that is getting closer by the day. A profit based, proactive approach to grain marketing not only makes good business sense to the producer, but it gives you as the merchandiser something positive to talk about in this environment and it allows you to keep your message on point.
For more ideas on how to help your producer customers execute their farm marketing plans, click below to learn about our online Grain Origination Course.