Spring Planning 5 tips to develop a solid marketing plan ISU Extension specialist advises being proactive rather than reactive
By DARCY MAULSBY Worried about rising input prices and other factors out of your control? There’s one key area where you can take control — your marketing plan. “Farmers are facing a lot of pricing pressure and will have some big bills with some of their inputs,” said Chad Hart, an Iowa State University crop markets specialist and Extension economist. “You need a marketing plan that’s Chad proactive, not Hart reactive.” No two years are alike, so marketing plans need to reflect this, Hart added. While the U.S. corn and soybean crops were smaller this past year, that was not true for some of America’s major competitors across international agriculture, Hart noted in his February 2023 ISU Ag Decision Maker report. “Despite drought challenges in South America and the war in the Black Sea region, global crop production was mixed. Corn production fell, while soybean production set another record. The combination of tighter U.S. supplies, strong U.S. prices, and expansion by some of our export competitors has put a dent in the export outlook for the 2022 and 2023 crops.” Since there are so many factors to consider when making a marketing plan, Hart offers these five tips to create a workable marketing plan for 2023: 1. Look at forecasts and take advantage of seasonal trends. For 2022-23 season-average prices, USDA held firm with corn at $6.70 per bushel, but raised soybeans to $14.30 per bushel, a 10-cent increase. What about new-crop pricing? While the export markets have been strong supporting pillars for corn and soybean prices in recent years, things are changing, especially with soybeans. “Global production is higher, despite the fall in U.S. production,” Hart noted. While the drought in Argentina forced USDA to
-Farm News photo by Darcy Dougherty Maulsby
THERE CAN BE PRICING OPPORTUNITIES in April, May and June, when U.S. farmers are typically more focused on planting than grain marketing. Use these trends to your advantage.
“It’s easy to get caught up in a psychological treadmill of greed, ego and fear. Creating a grain marketing plan and following it — while giving yourself some flexibility — helps you break this cycle.” CHAD HART Iowa State University crop markets specialist downgrade soybean production, the Argentine decline is being more than made up for by the increase from Brazil. “In fact, the growth from Brazil is enough to cover both the Argentinian and U.S. declines,” Hart said. “Add on the growth in soybean production in Paraguay, and South America has plenty of soybeans for the global market.” Futures point to the 202324 season-average prices being in the $5.80 range for corn and the $13.40 range for soybeans, Hart noted in his February 2023
report. “Both crops are facing 90-cent reductions in price. But these reductions in price will get larger if exports continue to fall short.” At times like this, it’s especially important to consider seasonal patterns when developing a grain-marketing plan. “There can be pricing opportunities in April, May and June, when U.S.farmers are typically more focused on planting than marketing,” Hart said. “Use these trends to your advantage.”
2. Establish time and price triggers. Incorporate a time target and price target with a portion of your bushels. “Maybe you want to put in an offer to trigger a sale when corn reaches a specific price,” Hart said. “If the price trigger doesn’t hit, also establish a specific ‘sell by’ date. When you have these offers in place, you don’t have to keep an eagle eye on the market and can focus on other things.” 3. Coordinate grain sales with bill paying needs. A marketing plan can be as simple or complex as you want. “Make it complex enough that you’re confident in it, and simple enough that you’ll follow it and take action,” Hart said. Also, consider when you need to pay bills like cash rent and crop inputs. “That gives you a reason to put in some marketing moves,” Hart said. 4. Try online marketing plan templates. Hart urges farmers to take
a look at the online grain marketing plans from the Center for Farm Financial Management at the University of Minnesota (https://www.cffm.umn.edu/ grain-marketing-plans/). Since 2001, Ed Usset has been writing and executing marketing plans for a fictional corn and soybean farm in southwest Minnesota. “These marketing plans are not intended to represent the perfect plan,” Hart said. “They’re a teaching tool that shows what a solid plan looks like and how to implement that plan.” You can also use the site’s free templates to start your own grain marketing plan, Hart noted. 5. Avoid getting trapped by emotion. “I hear farmers say, ‘I can’t market in a down trend,’” Hart said. “It’s easy to get caught up in a psychological treadmill of greed, ego and fear. Creating a grain marketing plan and following it — while giving yourself some flexibility — helps you break this cycle.”
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