As you look forward to 2019 make marketing one of your top priorities. This year showed a clear difference in those who knew their plan and took advantage of good market opportunities, and those who just hoped for good opportunities.
Recently the American Bankers Association (ABA) Agricultural and Rural Bankers Committee pulled together seven marketing tips for farmers:
- Know your break even. Factor in all costs, including living costs, to know what you need to make at the end of the year. Use your three-year (or five-year Olympic average) to estimate yield.
- When there are profit opportunities, act. While it might be tempting to wait and see how high the market can go, it’s important to sell when you can make a profit—even a small one. You never know how fast the market might nosedive.
- Set a goal and stick to it. Set a date to complete all of your marketing. ABA suggests goals like marketing 10% of the crop each month or marketing one, two or even three years out.
- Remove emotion. This might mean working with a marketing broker or simply forcing yourself not to bring emotion into these business decisions.
- Keep it simple—make a profit. Some sales might not be a homerun—but that’s OK, as long as you stick to a plan and make a profit that’s the right move to stay in business.
- Avoid spot markets. Don’t wait until you need to make a loan payment or need money to make a sale—that leaves you vulnerable to market lows. Learn more about local basis and forward pricing to maximize return potential.
- Understand and take advantage of available tools. There are many tools available to help market crops—look into apps, contracts, marketing and advisory services to see if any might help you.