2015 Brings a Fresh Start to Marketing

The calendar year is new, and it's time to embrace 2015! What a ride we had in 2014; record cattle prices, record milk prices at the beginning of the year leading to a slide into horrific prices at year end, and mostly lower grain prices.

It's going to be another wild ride in 2015 with still record high cattle prices, and grain prices that are holding firm for now just waiting and watching for weather to dictate price direction this year. Here are some items for your farm marketing to-do list for 2015.

Pay Attention to the Technicals Charts

At least weekly, look at daily charts, weekly charts and long-term charts to help you understand potential short- and long-term price moves that may be looming. Often, the chart technical indicators will be a strong sign of the next market move, should the fundamentals justify it.

Be Aware of Seasonals

Historically speaking, January through early April is the best time to price your grain, and harvest is the worst time. Be aware of seasonal tendencies of price action to capture better prices. Have the know-how and courage to make cash sales in the winter months for what you plan to plant in the spring. Cattle and hog futures also have seasonal tendencies for better prices, so keep an eye on those as well.

Keep an Eye on the Funds

We love them, and we hate them. They do have the ability to push prices at times, and so it is important to be aware of their stance in the market. For example, when they are historically long or short in the market, should they decide to go the other direction, just their exiting of positions can move the market more than expected.

Know Your Cost of Production

Figure your production costs early, so you can make better pricing decisions throughout the year. If you're sitting on your hands because you're not sure how much of a profit you might have, you'll likely not make ANY decision and miss the entire marketing opportunity.

Know Your Weighted Average Price

You might feel good if you sold some of your grain at the marketing year high, but if it ended up only being 5% of your production, your pat on the back may not take you so far. Always plan your marketing in terms of the big picture and your overall weighted average price.

Scenario Plan

Be ready for anything. Case in point: Russia limiting wheat exports pushed wheat prices much higher than many thought possible. Surprises can happen at any time, and can push prices dramatically higher or lower. You have to plan for different scenarios. Create a weekly battle plan for your farm marketing. It gives you confidence like never before!

If this seems daunting, it might be time to consider hiring an expert to help you. If you're up for the challenge, I wish you well in your 2015 farm marketing year!

If you have questions, you can reach me at nblohm@stewart-peterson.com, or post a marketing question on the Women in Ag forum.

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