Preparing for the Grain Merchandising Inevitable: Part 3

A Plan in the Making

Planning can and should start well before the crop is planted.  At this point, your planning is based on generalities.  There are certain patterns to your merchandising that you can count on each year.  Maybe it’s the amount of grain you carry out of harvest.  Maybe it’s the fact you always have to move a certain amount of bushels during harvest.  There may be slight variations depending on crop size, but the fact that these things occur routinely is a good start to your preliminary, pre-season plans.

At this point in the pre-season you have the luxury of time so you can be more conservative in your estimates and more aggressive in your goals.  For example, if you historically have to move 300,000 bushels at harvest and -20 is typically a good sell basis, perhaps your initial goals are to sell 200,000 at -10.  The important part here is that you have a plan of action that you can put to work!

Once you have a starting point than you can fine tune your plans as the situation becomes more certain.  In the pre-harvest period – once the crop is planted and growing – you can get more definite with your plans.  Maybe the crop is doing better-than-expected and you up your expectation of bushels to sell to 400,000.  The closer you get to harvest with no sale made, the more willing you are to lower your goals.

The pre-harvest planning routine is twofold.  It starts by setting goals and then having a stated timeline to achieve them...with adjustments made along the way as needed.  There are certain things you want to make sure you have in place before harvest starts rolling -- spreads, harvest delivery sales and financing.  It takes preparation to get all of these pieces in place to your liking.

Finding Value in the Process

Approach pre-harvest planning with a purpose...

Keep it a simple yet meaningful process...

A process that you are engaged in...

And then use it as the launching pad for your grain merchandising decisions and activities.

Take this approach to your pre-harvest planning and you will find it to be an invaluable exercise...one that you wouldn’t do without.