Farmers Are Better Informed Grain Marketers

Mark Smither
November 12, 2013

It’s been said that a farmer can make more money on a computer these days than he can in a combine. We don’t believe this is necessarily true—there are several important factors that make up the overall profitability of a farming operation—but it does point to the importance that producers place on making the right grain marketing decisions.

So, how do producers make their most important grain marketing decisions? More importantly, whom do they trust to help them make the right call? To find the answers, we interviewed 10 crop producers in seven key corn production states. This is what we learned:

  • Most producers sell about 50 percent of their crop prior to harvest and hold the remaining bushels for later opportunities. Grain storage is an important part of their broader marketing strategy.
  • Half of the producers we interviewed use grain marketing advisors to some extent. Producers felt they could not devote the time necessary to become proficient at grain marketing.
  • Because input costs have been so volatile over the last few years, most of the producers said they try to avoid hedging too much of their crop.
  • Most farmers rated themselves as a seven on a 10-point scale when it comes to marketing their crop. Ten represents selling at the highest point of the market every time.
  • Future demand in the export market and U.S. livestock feeding sector, as well as biofuels and identity preserved specialty grains, are changing the grain marketing landscape.

The key themes of this survey were clear—producers need to become better informed grain marketers, especially as profit margins are predicted to get thinner and thinner. As one producer told us, “Everything changes, and what worked a few years ago will not work now. Nothing lasts forever.”

Read the full paper.

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