Home / Markets / Markets Analysis / Strategy Components

Strategy Components

Agriculture.com Staff 12/05/2008 @ 2:09pm

We have all heard it: "You should be using a marketing strategy or a marketing plan." There is a difference between a "strategy" and a "plan" - strategy provides specific steps or action. A plan often is a broad approach and does not change once it is determined. Strategy is dynamic, and includes the key elements of time, discipline, sophistication, communication, finances and execution/trust.

First we will address time. Farmers (or for that matter, any business owner or operator) need to take time, consistently, to understand and monitor the markets. By taking time, you keep yourself informed. Not only where the markets are, but what may or may not be moving the markets. Time is a necessary element in the beginning steps of putting strategy together.

Discipline, or control of emotion, is the second strategy element. Often, farmers put much time into their marketing but do not have the discipline to follow through with specific or detailed action to execute the strategy. Discipline also suggests keeping on course. Sometimes the market changes, and your strategy needs to change. Very often, though, changing strategy without good rationale can lead to poor emotional decisions or, in the end, to a lack of follow-through and a breakdown in action.

Sophistication is knowledge of marketing choices (what tools you have at your disposal and how to use them). We believe it is imperative that every farmer focus on maximizing production, reducing input costs and understanding marketing strategies. Without knowledge of marketing tools, you will never know what tools or choices you can use, maximizing production and minimizing input costs.

Communication is the next key element. Business operators must be strong communicators. In the farming community, this may be as simple as being a good communicator with your spouse or business partner. However, it is probably just as critical to be a good communicator with your management team, which may include members such as your agronomist, veterinarian, insurance agent and market advisor. Perhaps most important is strong communication with your lender so that, when it comes time to execute strategy, the finances are available.

Finances are key to developing strong marketing strategies that give you flexibility and holding power. Trying to meet margin calls or pay for options with whatever dollars may be available in the checkbook is a likely recipe for disaster. Finances, through strong communication with a lender, are key.

The last step is execution or trust. This is knowing who you are and trusting yourself to do the best job you can to execute strategy. If you feel you are not the best person to execute necessary business decisions, then hire someone who is. Hire a professional marketing firm or an advisor who understands you, your needs and goals, and who can execute the elements of strategy that fit your needs and goals.

If you have comments or questions, call Top Farmer at 1-800-TOP-FARM ext. 129 and ask for Bryan Doherty.

CancelPost Comment
MORE FROM AGRICULTURE.COM STAFF more +

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Big Picture: CME Trading Weather