- Know their numbers:
The Best Marketers have the best command of their numbers. They know down to the minute details of their insurance levels and guarantees, the production history and expected yields, and all of the expected expenses that go into production. This gives them the most concrete information possible to plan their grain marketing and their worst-case scenarios that need to be planned for, both with production and prices. They roll their sleeves up, spend the time in the spreadsheets, and understand what their numbers are.
- They disconnect market action from their numbers.
What do we mean by that? The market does not care what your numbers are or if you are profitable. Master grain marketers have the ability to disconnect completely between their numbers and what they think should happen vs. market action. They have the unique ability to market regardless of how they feel about it.
If you assume just locking in a profit- especially selling a small % of production- but not manage the risk of the rest of your production as we see all the time, and then market moves against you, most will dig their heels in when markets fall and won’t continue to market because of the attitude of defeat. The market will take away the profit of the small % if you let it by taking away most or making it a loss on the rest of the production. Yes, it’s not as bad, but you need to take the signal the market is sending. Taking the predator mindset, you can make a complete plan to manage your risk. Top marketers use a system to manage the when and how to market their production at a much higher % of their crop vs. just a smaller % of the crop. This lets them hedge their profit quicker and at a much higher rate than most.
- The Master Grain Marketer never stops executing their plan over and over again.
This is what we like to talk about of being in the predator mindset versus the victim mindset. Typical producers refuse to hedge when market is at or below breakeven and have an attitude of defeat in the market. The typical producer then relies on hope that the market will give it back to them.
Top Marketers are not perfect traders. The top Producers execute their plan repeatedly. They are removing their emotion by using some type of system against their concrete numbers (production versus their inputs). They understand the marketing tools and how they can work together with their numbers and how market action can hurt or help their farm’s profitability. This provides them with the confidence to put the position on regardless of if the last position was a winner or a loser.
On the Ag Astra Facebook page, we have a video where Tim goes through this presentation and an example from 2019-2020 marketing year. Make sure to go listen to it!
If you need help managing your numbers, we have a presentation from Conservis on a Farm Management System that you can view. Just click this link to fill in your information and the video will be sent to you. Farm Management System Link
