Why You Need to Make Sure You Don't Just Think about Marketing Grain at Harvest
As a farmer, you know that marketing your grain is an essential part of your business. But many farmers make the mistake of only thinking about marketing their grain at harvest time, when they are faced with the urgent need to sell their grain to cover their costs and generate income. In this article, we'll explore why you need to make sure you don't just think about marketing grain at harvest, and how planning and preparation can help you improve your grain marketing efforts and ultimately, your bottom line.
The risks of only thinking about marketing at harvest
One of the biggest risks of only thinking about marketing at harvest is that you may be forced to sell your grain at a lower price than you would have if you had planned and prepared in advance.
This can happen for many reasons, including:
- Market conditions: At harvest time, the market may be flooded with grain from other farmers, which can drive down prices and reduce the local basis price that you receive.
By planning and preparing in advance, you can better understand market conditions and trends, and can make more informed and strategic decisions about when and how to sell your grain.
- Storage constraints: At harvest time, you may be limited in your ability to store your grain, which can force you to sell your grain quickly, even if prices are not favorable. By investing in storage facilities and planning ahead, you can better manage your storage capacity and can avoid being forced to sell your grain at a lower price.
- Lack of options: Finally, if you only think about marketing at harvest, you may be limited in your options and opportunities, and may not be able to take advantage of changing market conditions or trends. A good example of this often occurs in speciality grains whereby buyers have a certain quota to fill and thereafter, no longer have a need for further purchases, forcing downward pressure on the grain price.
By planning and preparing in advance, you can explore different marketing channels and options, and can make your marketing efforts more flexible and responsive.
The benefits of planning and preparation
Planning and preparation can provide many benefits for your grain marketing efforts, including:
- Better market knowledge: By planning and preparing in advance, you can better understand market conditions and trends, and can make more informed and strategic decisions about how and when to sell your grain. This can help you maximize your income and your farm's performance, and can make your marketing efforts more successful and effective. A great way to do this is to engage an advisor to help you make your grain marketing decisions.
- Increased flexibility: Planning and preparation can also give you more flexibility and options, which can allow you to respond more quickly and effectively to changing market conditions and trends. This can help you take advantage of new opportunities and can make your farm more agile and responsive to market changes. Knowing your input costs and your breakeven price is critical when designing your grain marketing plan.
- Improved control: Finally, planning and preparation can give you more control over your marketing efforts, and can allow you to manage your costs and prices more effectively. This can help you achieve your marketing goals and can make your farm more successful and sustainable.
How to plan and prepare for grain marketing
To plan and prepare for your grain marketing efforts, you can:
- Regularly review market conditions and trends, and seek advice from experienced professionals, such as grain marketers or financial advisors
- Invest in storage facilities and manage your storage capacity to avoid being forced to sell your grain at a lower price
- Explore different marketing channels and options, and develop a diversified marketing plan that is tailored to your farm's needs and goals
By taking these steps, you can make sure that you are not just thinking about marketing at harvest, and can improve your chances of success and profitability.