Crop marketing a crucial part of season

April 29--Even with intermittent snow lasting into mid-April -- delaying crops being planted -- vigilant farmers continue checking the latest in crop marketing reports to ensure their best prices for their harvests.

Rich Morrison, manager of marketing services for Diversified Services Marketing Group, said that with the end of the crop insurance deadline in March, farmers have already made decisions on their coverage for the year.

Insurance is simply part of the equation when it comes to farm and price management, he said.

"We encourage folks to look at complete risk management on the farm," Morrison said. "Once they've insured the crop and guaranteed a number of bushels, we then encourage them to be aggressive in their marketing of the crop. There are different tools available that they have to price and forward sell their crop ahead of time. When the market gives them good advantages, we want to help them seize those opportunities."

Luke Worrell, marketing adviser and real estate agent for Worrell Land Services, said crop marketing never ends for modern farmers. In general, people tend to think that farmers plant the crop, grow it, harvest it and simply sell it.

But there's much more about which farmers have to be aware, he said.

"My grandfather is no longer with us, but I would imagine that in 1950s and '60s, he probably wasn't aware of if it was raining in Argentina or the infrastructure of Brazil," Worrell said. "All of these things probably weren't a thought in his head but the modern farmer, we're affected by that stuff and you have to be aware of it."

Worrell said that it's a good reminder for producers to remember to be active when it comes to crop markets. With a lot of grain being forward priced, or sold ahead of time, someone paying attention to the markets can avoid overselling or doing too little to take advantage of crop markets.

Part of staying informed is taking advantage of the opinions of marketing analyst experts.

"It's their job to understand the complexities and the world around us that can affect these prices," Worrell said. "A hardworking farmer doesn't have the bandwidth or time to wake up early and look at the weather in South America and all these other things. You don't necessarily have to listen or take their advice of a professional, but I think it's important to read up on several different perspectives and takes of what's going on out there."

Farmers should also look into the services offered by elevators, who do a lions share of the crop marketing legwork. Worrell said it's important to check the market daily and understand the changes as they come.

Worrell also indicated that while the amount of noise in the crop markets can be tempting to ignore, it's important to be cognizant of what's going on or to at least have an idea of what the markets are doing and why.

"Whether it's scary, boring, or exhilarating, these things are directly affecting your bottom line so common sense would tell you to be mindful of them," he said.

Farmers can also benefit from being aware of different pricing programs and diversifying into those programs, many of which are available through elevators, Worrell said. In addition to cash sales made throughout the growing season, Worrell said he likes to ensure that at least a portion of a projected production is in a program.

"You work your way toward harvest and you've hedged yourself in a way," he said. "You have some in a program, you've timed your rallies. I think the worst thing someone can do is to be oversold, obviously, by being too aggressive early and not having the grain to cover it. Or not doing anything. Historically speaking, around harvest time you see a dip in prices unless we just have a terrible yield."

When considering how to approach crop marketing, Worrell advises farmers to ride the line between overselling and not doing anything as they both present a lot of risk.

"Stay in tune with the world around us, not just locally but abroad as it's affecting us more than it has in the past," he said. "And be careful to find that balance between not doing anything and doing too much too early."

Nick Draper can be reached at 217-245-6121, ext. 1223, or on Twitter @nick_draper.

___

(c)2018 the Jacksonville Journal-Courier (Jacksonville, Ill.)

Visit the Jacksonville Journal-Courier (Jacksonville, Ill.) at www.myjournalcourier.com

Distributed by Tribune Content Agency, LLC.