Farmers think marketing while planting
With volatility in the markets, some farmers pay more attention to what happens to their crop once it comes out of the field. In some cases, marketing the crop before it's even planted is becoming a habit.
During last week's spring planting tour, farmers shared how marketing is becoming a regular part of their operation.
Rubenacker Farms, a 9,000-acre operation located in southeast Illinois, relies on staffer Kelly Robertson to monitor market decisions.
Robertson said that considering the high costs of production, marketing is becoming critical.
"If you can keep your production above trend line and market above the money, you should be all right," Robertson said.
Robertson added, "In order to make this a good year, the most important thing we can do is maximize our production and then maximize on the marketing. Will it be the best year we ever had, I don't know, but I don't think it will be the worst."
Because most of the soybeans are produced as seed-beans, the real marketing is focused on the corn crop, Robertson said.
To start the day, Robertson charts the corn and soybean basis at five area elevators.
"Anytime we can grab a good basis, we jump on it and hold it for as long as we can. With the exception for once or twice, we marketed everything with a positive basis last year," Robertson said.
With about 25% of last year's crop still unmarketed, most of this year's crop is already sold.
"If it's not on a forward contract, we got it on the Chicago Board of Trade," Robertson said.
When asked if Rubenacker Farms has priced any of its 2007 or 2008 crops, Robertson smiled and said yes.
"Some of it yes. It's kind of hard not to when the Dec. corn futures contract for 2007 was $2.85 recently," Robertson said. "That's a no brainer."
Russ Ramsey operates a southeast Illinois farm with two cousins. Ramsey said the responsibilities of the operation are split up, and one of his cousin partners handles the marketing decisions.
"We work with several market advisory services. We use puts, forward contracts, and the advice of the services," Ramsey said.
With 500,000-600,000 bushels of on-farm storage capacity, and plans to add more, Ramsey said this helps marketing a more profitable endeavor.
In southeast Arkansas, some corn growers took advantage of forward pricing January deliveries with area poultry companies, according to Carl Hayden, University of Arkansas Extension agent.
"Farmers that can store and dry their own corn have forward priced corn at $2.90 per bushel," Hayden said.
Mike Carson operates a 9,400 acre farm in southeast Arkansas with in-laws. Because on-farm storage capacity lacks the ability to store all of their crop, that effects planting and marketing decisions.
"We can't store all of our corn, so a third of the acres go into corn, two-thirds into soybeans," Carson said. "But, to relieve some pressure from having to market at the top price, we did pretty good in pre-pricing our nitrogen this year."