By Scott Shiels
Harvest is here, and with it, the emergence of marketing opportunities for the newly-harvested crop. As summer breezed by, this crop season continued to look like it might even surpass the previous year in terms of quality and yield. We won’t know final results for a month or more, but all things considered, it looks very good so far.
Futures markets were lower nearly all summer, with world stocks of wheat, beans and corn all being adjusted higher from the spring on through the summer months. That, coupled with mostly good to excellent crop conditions in most of North America, pressured prices lower, seemingly every day. Trade tariffs imposed out of the U.S. by President Trump have not helped the situation, as he seems hell-bent on using tactics such as these to “Make America Great Again.” Still, there has been a softening in many areas of the trade war, so hopefully there will be mostly smoke and no fire when it comes to agricultural commodities.
For producers approaching harvest, or already finished, there are a few things that can be done to aid marketing efforts going forward with this, and every, crop. First and foremost, take good representative samples! Thorough and accurate sampling of your grain at harvest time is one sure way to maximize returns throughout the year, as you and your buyers will know exactly what you have and what they will be getting. There really is nothing worse than shipping a load of grain hundreds of miles away, only to have it arrive and not meet the buyer’s specs, leading to discounts or rejection, both very costly to the farmer.
Secondly, I recommend sending your samples to as many buyers as possible, and in as many different areas as you can. In many cases, especially in the cereal grains, different regions have harvested a much different quality of crop. If you happen to have something in your area that another can benefit from, you vastly increase your chances of gaining yourself some premium for your grain.
Next, get yourself on email and text lists for as many buyers as possible to take advantage of market updates and pricing opportunities. There are many free services out there (Grain Millers is one of them), as well as economically-priced subscription services that will keep you in the loop and get you to the front of the line when opportunities arise. This market is all about information and opportunity, so you need to do whatever you can to maximize these chances.
One other tool that you can use to increase your chances of getting the prices you want is the grain pricing order (GPO) or target price contract. These options are available with most buyers, and will give you the opportunity to pick your price, the quantity you would like to sell at that price, and the movement period you want to ship it in. If you do one of these contracts, you just need to be committed to your price, as the company can trigger these contracts quickly, even when the market differs substantially from the price you want. Some producers think these contracts give buyers an unfair advantage, but I firmly believe they truly are advantageous to both sides.
Here’s hoping harvest is very kind to you!
Until next time…