Finalize your grain marketing plan
By Alberta Agriculture and Forestry
Oct. 13, 2015 - Now that grain is being harvested and starting to go in the bin, it is time for producers to finalize their grain marketing plan.
"Farmers often go through numerous hats in a year," says Todd Bergen-Henengouwen, market analyst, ag inputs, Alberta Agriculture and Forestry (AF), Edmonton. "Quite literally this might be true, but figuratively it also holds. Farmers need to be mechanics, veterinarians, meteorologist, farmers, and marketers. Growing a crop is only half the battle; marketing the crop is the other."
- setting financial goals of where you would like to sell your grain
- exploring price and delivery alternatives
- seeking market opportunities to ensure you are receiving the best available value for your commodity
"Good marketing takes planning, selling discipline, access to good market information and a good understanding of pricing and delivery alternatives," says Bergen-Henengouwen. "It is easy to get greedy when the market rallies. A good marketer knows that they won't always hit the peak of the market and knows when to pull the trigger on a deal."
Keys to marketing are to:
- know your cost of production
- spread sales over a 12-14 month period
- avoid pricing during heavy delivery points
- gather information from various marketing sources, such as commodity futures brokers, cash grain brokers, local buyers etc.
- know your product and know what you have in the bin
"There are numerous types of contracts and delivery options available to producers to use," says Bergen-Henengouwen. "It's important to look at all options and decide which way is the best way to market your crop. It's also important to understand the mechanics of how the contract is executed to ensure informed decision making. "
For more information on grain marketing, see the Alberta Agriculture Marketing Manual articles on the Farm Manager website. "Alberta Agriculture also has a series of YouTube videos that are related to grain marketing and farm business management," adds Bergen-Henengouwen.