Home Farm Equipment Harvest is here! What’s your marketing plan?

Harvest is here! What’s your marketing plan?


Harvest has formally began in lots of locations throughout the corn belt. Growers have meticulously made their crop plans. They deliberate the seed inhabitants, weed/insect administration, gear upkeep and certain a pair hundred extra selections to develop this crop.

With all of the planning and energy that has gone into the manufacturing facet of this 12 months’s crop, what efforts have been accomplished to handle the marketing facet? Hopefully that plan doesn’t appear to be this:


Least favourite job

As a grower, arising with the marketing plan is seemingly one of many least favourite components of the job. It feels extra rewarding to see the fruits of our labor come throughout the yield monitor within the mix. Nonetheless, should you have a look at “Revenue” line merchandise on your earnings assertion, that marketing plan greater than seemingly has the biggest influence to your operation’s funds.

The reason for this reluctance to work on a marketing plan may be for a number of causes. Perhaps the thought is the market has been so excessive for thus lengthy that I’ll do fantastic it doesn’t matter what occurs. The 2008 and 2014 crop years have been robust classes for growers who put on “bullish blinders”.

One more reason for this reluctance might be FOMO – worry of lacking out – if costs transfer larger, like what they did for the 2020 crop. A 3rd cause could also be as a consequence of not understanding what instruments are on the market to make use of in a marketing plan, or not understanding what the benefits and dangers are of utilizing these instruments.

The place costs can go from right here is unattainable to foretell. If you happen to have a look at modifications in yield alone, there are some wild variations it what the ending shares for the crops can appear to be.

Under is a chart of the yield modifications from the September USDA report back to the ultimate yield for the crop 12 months. 

Eric MeyerChart showing U.S. corn yield

On corn, the common enhance has been 2.4 bushels per acre (bpa) and the common lower has been 3.8 bpa. Making use of that to the present projected harvested acres might imply 200 million extra bushels and a 1.6 billion carryout (assuming no change in demand), or 325 million much less bushels and a 1.1 billion bushel carryout. 

Under is the identical chart for beans displaying the yield modifications from the September USDA report back to the ultimate yield for the crop 12 months.

Eric MeyerChart showing U.S. soybean yield

For soybeans, the common enhance has been 2.0 bushels per acre (bpa) and the common lower has been 1.0 bpa. Making use of that to the present projected harvested acres might imply 170-million extra bushels and over a 350-million bushel carryout (assuming no change in demand), or 85 million much less bushels and round a 100-million bushel carryout. 

What’s your plan?

Do some what-if situation planning. Sit again and ask your self, if corn costs set again $1 or extra per bushel, how am I positioned? On the similar time, you could ask your self if corn rallies $1 or extra, am I located to seize the rally on sufficient bushels to make sufficient of an influence to my backside line?

Is a plan for the 2021 crop sufficient?

Quickly after the 2021 crop is harvested, additional plans and actions for the 2022 crop will likely be proper across the nook. This may embody fall nitrogen utility and seed selections. Rising enter prices for the 2022 crop has been on the highest of growers’ minds during the last 6 to 9 months as commodity costs have risen.    There is a hesitancy to do something for marketing the 2022 crop given the priority of upper enter prices.  The query you could ask your self is, do I’ve the chance that crop costs can fall regardless of larger enter prices?

The market doesn’t promise you profitability. Within the final 15 years on Sept. 15, close by corn futures have been above $5 solely 3 times. It could be a great time to begin to develop that plan for 2022 by getting some flooring in place whereas preserving upside flexibility.

Capitalize on alternatives when the market offers them to you.

With decrease enter price for 2021 and better crop costs, there are good worthwhile marketing selections that may be made. There are additionally nice beginning factors for marketing selections on the 2022 crop. Don’t get caught with the chance that costs can fall on each crops. There is nothing extra irritating than lacking out on good alternatives throughout a number of crop years. You might have to capitalize on the 2021 crop 12 months to construct up some working capital to face the subsequent couple years.

Step one is creating that plan and stress-testing it throughout a number of market situations. Once more, I’ll ask the query: “What’s your plan?”

Contact Advance Buying and selling at (800) 664-2321 or go to www.advance-trading.com.

Info offered might embody opinions of the creator and is topic to the next disclosures:

The danger of buying and selling futures and choices may be substantial. All data, publications, and materials used and distributed by Advance Buying and selling Inc. shall be construed as a solicitation. ATI doesn’t preserve an unbiased analysis division as outlined in CFTC Regulation 1.71. Info obtained from third-party sources is believed to be dependable, however its accuracy is not assured by Advance Buying and selling Inc. Previous efficiency is not essentially indicative of future outcomes.

The opinions of the creator aren’t essentially these of Farm Futures or Farm Progress.


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