When looking toward 2005, we will encourage producers to recognize that, at some point, prices are likely to rally; and when they do, you need to have a plan in place. We believe offensive marketing on the first 25%-50% of expected production is well warranted in most years, and will be useful and perhaps necessary for 2005.

What is offensive marketing? Basically, it is setting points or goals so that when the market reaches levels at which you are comfortable selling, you go ahead and follow through with a plan. Often, the first sale is the hardest sale. Therefore, by having a plan or, in most cases, an order to forward contract on a price rally, it gets done. Sometimes this occurs without you being aware that the market rallied in any particular day or week. By setting goals, writing them down, and following through, this often leads to more success in marketing than those who wait for an opportunity but yet have no plan.

Often, the general problem with waiting for an opportunity without a plan is that, once it hits the level you have been looking for, there is a general tendency not to follow through with your plan. As an example: If the market moves higher this week than it did last week, maybe it will be higher next week; therefore, let's abandon the plan and see what happens. If prices are lower next week, then you have regret. If prices are higher, then you feel great because you outguessed the market. Then the vicious cycle begins all over again, as you now set newer and higher objectives that the market does or doesn't reach. Bottom line, those who set goals and follow through with an offensive marketing plan often sell early and sell often. In many years, these sales turned out to be some of the better sales.

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Remember, your initial sales are hopefully your worst sales. If you are concerned that selling too often could be a mistake, be sure to buy out-of-the-money CALL options. Then, not only have you given yourself coverage, but you should also have provided yourself with additional confidence to sell more crop on a rally. You should have confidence of producing at least 50% of a crop, unless there is a problem from Mother Nature. That's what insurance is for. Therefore, look to be more offensive in 2005.

If you have questions or comments, contact us at 1-800-TOP-FARM ext. 129.