By Blake Jackson
A well-defined grain marketing plan is essential for agricultural producers seeking to optimize profitability. This structured approach empowers informed sales decisions and mitigates risk throughout the marketing cycle. Here's a breakdown of the four key steps involved:
1. Production & Cost Assessment:
Initiate the process by meticulously estimating your anticipated crop yield and associated production costs.
Leverage crop insurance strategically to guide pre-harvest sales decisions.
For superior coverage compared to Yield Protection (YP) policies, consider utilizing Revenue Protection (RP) insurance.
2. Define Your Marketing Horizon:
Establish a timeframe for grain sales. Will you market pre-harvest, at harvest, or post-harvest?
The chosen marketing horizon significantly impacts your pricing strategy.
Avoid pre-selling your entire crop. Strategically distribute sales throughout your defined marketing window.
3. Establish Pricing Objectives:
A thorough understanding of your production costs (determined in step 1) is paramount for setting target sale prices.
This knowledge empowers sound marketing choices and fosters the achievement of your farm's financial objectives.
4. Formulate Goals & Implement Strategies:
Clearly define your specific goals, such as maximizing profits, attaining a superior-than-average price, or selling at harvest.
Risk management is another prevalent goal, focusing on safeguarding your operation against price volatility.
Develop a comprehensive plan outlining specific actions to achieve your established goals.
Photo Credit: vecteezy-bergamont
Categories: Wisconsin, Business