Grain Marketing for Dummies

[cuban_assassin]

Hi all I was wondering how many of you guys sell a good portion of you grain after harvest and "buy paper". I never have, I used ddc and basis contracts and hold the grain. Marketing is one thing that I need to improve on but never have had a good enough understanding to take it any further.
I have considered hiring a organization to help me with this but they quoted me $4.00/ acre to do it which seemed quite expensive. Do any of you hire marketing consultants?
I know my costs of production and therefore my break-even price per bushel.
Options seem complicated and potentially costly to me but maybe they are not. When you consider how much money we put in the dirt every year that is not refundable, perhaps trading paper is much less risky.
I would appreciate any thoughts. TIA

[tweety]

A 50 bushel crop of wheat at 6.00 means that 4 dollars an acre costs you 8 cents a bushel.

Have you taken a 2 or 3 day marketing course? That is definitely the first step.

[farmaholic]

For me, using a marketer would take the emotion out of selling the grain. But beware, they can only make decisions based on the information("good or bad information" therefore "good or bad decisions") at hand at the time, none own a working crystal ball, so don't expect to hit the highs consistently or even often.

I compare it to investing money, I doubt it matters to anyone more than you, what you get for your grain!!!

[Hopperbin]

Paper will cost you. I farm and agree with what you have done in the past. When I took my marketti g classes many years ago we did many scenarios. I realized if you do enough of them doi g what you do now is best. Your not a dummy. That is the first and only question answer on the 101 level. Someone phoned me up one day you need to I vest in physical silver. If I would have did as told I would have lost my 4000 acre farm. Then there will be someone coming arou d to ask you ti write the puts and options for wheat and canola and claim a guarantee of profit. There will be profit one year or more and you will be broken at some point. That is why they use you and not themselves. Just my opinion.

[AgrivilleAdmin]

Farms.com did a series of educational videos on grain marketing basics with Moe Agostino - they are free to watch and may provide some background.

http://www.farms.com/market-school/

Here is lesson one.

[Hopperbin]

You can hire the experts but remember ita not guaranteed. I grew and I tended green peas this year. In january after the saskatoon show my marketting agency recommended selling 9 dollar greens. I phoned them up a d asked where who. They told me to ****ing phone around. So i did just that. There was a 9 dollar price as of 4 ****ing days ago. I was furious. They bowed out before I said your fired. I say watch the markets yourself. Target basis seems to be my best friend. Be cautious of wheat.

[Hopperbin]

Yes i am a dummy. This year it seemed there was money to be made pricing wheat and durum early. Depends where you farmed this year. Turns out pricing early may have got you cgc grades and a dicount from hell correct? Best scenario is know what you have and upgrade it. Time tested.

[Hopperbin]

Everything mo ag says is correct.

[wmoebis]

Hopper are referring to the fact that Red spring wheat standards changed Nov 19th after CGC had graded most of the harvest samples and farmers had already taken samples to elevator for grading?
Anyone with red spring wheat that was down graded for mildew should take samples back in and grade them against the new standards.

[theplowboy]

I find grain marketing is a real challenge. What ever you decide, you will second guess yourself.

We try to keep it relatively simple and don't sell cash grain at harvest usually. If you don't have a plan, you can sometimes get lucky. My friend's dad who was a good marketer always said to me "You never go broke taking a profit...and don't look back on what you could have made."

This year we sold some ahead last summer and that has helped.

Good luck, it is worth learning about.

[Hopperbin]

Oh come on now. Pre sellers of wheat and durum got ****ed plain and simple. 6 dollar discount on 6 dollar price equals 0. Just ran it past the 5 year old to confirm. I am correct. Talk to my 5 year old.

[theplowboy]

I agree
we sold some canola and soybeans