I am thinking new crop marketing exclusively.
The 2011 harvest has long been priced. Did I get the highest corn price? No. Did I sell at a profit I was comfortable with? Yes, and the cash has been available to pay down debt and receive supply discounts.
I am comfortable letting others have highest-corn-price bragging rights.
Soybeans are a different story. I may have gotten near the high price when they were marketed right off the combine, and did not have to pay any storage costs on beans.
What to do with our expected 2012 bushels should be at the top of our priority list now.
I am hoping we have priced a few 2012 bushels already. Enough to cover fertilizer costs, perhaps.
The challenge as we watch price movements may be remembering that no one can predict the future. Any time someone tells me what the price of grain will be some time in the future I run screaming from the room.
It is very tempting to rely on an industry expert for price guesses out into the future. However, who suffers when these guesses do not materialize?
I prefer to take profits in increments if, and when, the market offers them to me. I sleep better at night knowing there are some of my variable and maybe even my fixed costs of being a grain producer covered by a marketing action.
I do not understand the concept of risking my entire production budget on the hopes of a profitable winter market.
Remembering two of the lessons taught in the University of Minnesota Winning the Game marketing workshops:
• The historical average price peaks for corn and soybeans occur between April and July
• The “most” we can expect harvest prices to move above the January price is: $1.60 for corn and $2.75 for soybeans
FYI — December corn traded near $5.90 Jan. 1 and November beans were $12.20