Posted on February, 4, 2025 at 05:08 pm
This comment came in a winter program, right as I was starting my presentation: “Do you have anything that will work in grain marketing every year? I seem to sell ahead in years when the market rallies into harvest, and then have nothing sold ahead in years like 2024. What should I do differently?”
I like to keep my presentations positive and at the same time realistic. This was a good question, a tough question — a potentially negative question. I told him I would try to answer his question at the end of the seminar. This could give me some time to think back over the last four decades and look at some of my long-term charts during the break.
Some years, making grain and livestock marketing recommendations is easier than others. In the mid-1980s, it was tough — in many years, you did not have an opportunity to sell at a profit. The markets were flat, with little opportunity to lock in acceptable prices. It was also challenging from 2015–2019, but selling the seasonal rally into June worked every year.
After the COVID-19 lows in April of 2020, the commodity markets all turned higher. Also, market volatility has increased, with more fund trading every year. During the pandemic, farmers had to deal with some challenges involving different logistics and getting inputs delivered. Some replacement parts were hard to find. Input costs began to move higher, but crop prices went up faster than input costs in 2021 and 2022. The grain markets were at some good historical price and profit levels through early 2023.
By 2024, it was tough again; the combination of lower crop prices and higher input and interest costs created a tough marketing environment. Looking back, I helped a lot of farmers survive in the price collapse in the mid-1980s, and believe me, the ’80s were a lot tougher than 2024.
What helped me and my customers in the 1980s the most was a series of rules I developed. I asked farmers a lot of questions about how they made decisions, when they decided to sell, and why. I asked them to write summaries of their sales. I noted how some farmers managed somehow to make money every year, and they were able to make large profits in the good years, when they had good yields and high prices.
Source: Succeful Farming