3 Marketing Tips to Tackle Spring Opportunities

Corn photos from MI Corn College 2014. ( Aimee Cope )

While planting might seem like a distant dream, it is top of mind for many farmers. As planting draws near, farmers need to have a well-established plan in motion for spring marketing.

“Have your marketing plan built before you head out in the spring,” says Angie Setzer, vice president of grain for Citizens LLC. “Think it over in your head—what are you hoping to accomplish. When it comes to marketing, nine times out of 10 the market gives the best marketing opportunity when the farmer doesn’t have time to give the market their attention, like spring planting.”

As you go into planting, here are a few tips to Setzer says to keep in mind:

  1. Have target orders in place.
    “One thing we’re discovering is that some opportunities presented in the market structure don’t last long—have orders in place and know what you want to accomplish before you go out into the field.”
  2. Have a plan for moving old crop and be prepared to move it even when it might not be the most convenient.
    “Sometimes the best basis opportunities come when the farmer is busy. Move grain when it’s not the most convenient, weigh the pros and cons and maybe do something someone else isn’t willing to do.”
  3. Consider incremental target orders.
    “I like to see a good portion of production with target orders in places—orders that tend to run a decent 10%, 15% to 20% rally from the previous fall lows. Last fall in corn the lows would have been $55 or $3.60 futures and using the percentage gain approach would put us around that $4 futures target on old crop. Try scale selling. You don’t have to sell the entire new crop, I generally say 50% to 60% of your expected production using incremental values to ensure you’re capturing a rally. Use a broker or elevator to set target orders. Having an order in place is the main thing.”

Corn acres probably won’t hit USDA’s official estimates.

“I’ve been saying since November there is no way we’ll get 94 million acres of corn because of fall field work not getting done. We needed warm, dry spring to get caught up and we didn’t get it," Setzer says. "Plus, the planting cost increases you’ve seen across the board for all crops, particularly corn, will be taken into consideration. Also consider local changes in corn demand, like near me where we have a new soybean crusher that’s pushed more farmers to plant soybeans. This doesn’t mean corn will be below a year ago—we’re seeing conversations at 90 to 91 million acres of corn. If we see this NOAA precipitation and temperature prediction we could whittle these down more.”

 

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