Top Tips to Keep Your Marketing Plan in Check

Some of us believe that the hardest part of grain marketing is creating a marketing plan. But I think it’s safe to say that sticking to the plan, or what we call “executing the plan,” may be the most difficult thing to do. It’s not because the plan is difficult to execute – rather, it’s because it is emotionally hard to sell when there are so many uncertainties. We see the market volatility increase and are paralyzed by it. Then we simply question whether the plan is good enough for this year, and often miss out on catching profitable prices due to fear.

Here’s what it all boils down to: goals. When you create a marketing plan each year, you do so with goals for your farm in mind. Maybe it’s to make enough to reinvest in structures or equipment. Perhaps you want to begin turning over a portion of your farm to your children. Whatever your goals are, your plan is was created to help you reach them. Failing to execute on your plan may be the reason you fail to meet your goals. That’s why, this time of year, it’s important to assess where you are in your plan.

Here are some tips from the Cargill MarketGuide experts to help you stick with your plan:

  • The plan you started in the winter is not the same now. Don’t abandon the plan; review and adjust it to represent demand or weather changes, and take advantage of market realities.
  • Think about using a floor contract with an upside. This avoids paralysis in wondering what the market may do, and establishes a minimum profit with the floor, accompanied by the potential to capture more on a market upswing.
  • Use percentages instead of bushels – psychologically, percentages often sound like less of your overall crop than actual bushels do. And as the season progresses, base your sales on the percentage outlined in your plan. Consistency pays.
  • Quick ship basis opportunites arise at ethanol and processing plants early in the summer. If you can deliver, this is often an easy way to capture higher prices.
  • Do your best to avoid the bait of capturing every nickel. Your plan is designed to capture profitable levels. If you abandon your plan and begin stalking the markets, you may get to a point where you don’t sell at all. Bushels remaining in the bin will fall victim to last-minute, low-profit sales ahead of harvest.
  • Finally, don’t forget to take care of the basis – it’s easy to get caught up in weather markets, but you’ll have cash flow needs throughout the year. Be early to capture a good basis when they hit.

When you take the time to set goals and develop a plan, you owe it to yourself to execute that plan. FOMO – or fear of missing out – is real. But it’s a state of mind. Work to overcome that fear, because the most disciplined grain marketers are often the most successful ones.

Our program, Cargill MarketGuide™, is offered by Cargill Commodity Services, Inc., a registered commodity trading advisor and wholly owned subsidiary of Cargill, Incorporated. This affiliation with Cargill provides Cargill MarketGuide™ clients with real-time access to market information from every major grain producing region of the world; we refer to this affiliation as the Cargill Connection. Our recommendations are driven by the desire to meet our customers’ business objectives and Cargill MarketGuide™ clients are never under any obligation to sell their grain to Cargill. Past results are not necessarily indicative of future results. The risk of loss in trading commodity interests can be substantial. Do not reproduce or distribute. © Cargill Commodity Services 2018. All Rights Reserved.