Marketing Groups Plans Going into Spring Planting

By Marlene Dufault

A look at the issues and strategies some grain marketing groups in the region are discussing going into the 2003 growing season:

Moorhead Marketing Group
“We keep in touch with George Flaskerud (NDSU) and Ed Ussets’s (U of M) marketing plan. (We have one) meeting a few days before the March Prospective Planting Crop Report.  Another meeting is scheduled with Mike Krueger from the Money Farm. So hopefully we will discuss as a group what kind of strategies we want to lay out for pre-season, pre-harvest marketing plan…Once you know what your cost of production is, then you put your own marketing plan together... We listen to Ed (Usset) because when he says something, he usually has the facts to back it up… Some farmers do follow some marketing firms and do pretty good too, so it’s who you feel comfortable with. Some members have already marketed some wheat way back last year when wheat was over $4 last fall using the futures.”

– Rick Morgan, Northland
Community Technical College
Farm Management Instructor

Bismarck Area Marketing Glub
“We have talked about some contracts on oilseeds with maybe some opportunity there. As a group, we have just been talking about them.  We are still struggling with a little bit of last year’s wheat to sell. Quite a few guys were in the drought. Basically, everything south of I-94 was awful dry last year and some north of the interstate…When you come off a year with no crop or very little crop, it is pretty hard to get excited about planning to market this year’s crop when you are not sure you are going to have one…A number of guys have looked at contracts on barley.”

– Mark Holkup

Froid, MT Marketing Group
“There is a fair amount of durum raised in the area and some flat forward contracts that are being offered for durum that didn’t look like too bad of a place to get started.  We just let this futures market slip away on us; we didn’t take advantage of it like we should have. Durum and spring wheat is the crops that will be most planted in the area.”

—Kim Murray

RedNob Marketing Group, \Lisbon/Enderlin, ND
“We are looking at the basis levels which have been very good so we are encouraging the producer to look at locking in basis levels for fall if they are attractive. We also encourage looking at options and futures contracts.  Some goals probably, as far as corn, is to start pricing some when Dec. futures would be at $2.50; soybeans probably no action at this time, and as far as wheat goes, the basis levels have been very attractive on some of the new crop bids. The group has also been looking at weather conditions that would give any direction.”

—Virgil Dagman

Lustre Marketing Club, Valley County, MT
“We base a lot of our ideas on what is happening towards the middle of April. George Flaskerud, who we follow his ideas, has said that the middle of April is important. He has been pretty close to right in the past year.  We are waiting to see what happens this spring, as far as moisture and such.  Right now, we are still a little dry as is most of Montana and into Alberta. We have been fortunate with the drought since we are in northeast part of Montana. We have had more moisture than other parts of the state in the past few years so our area isn’t as hard hit as some. 

“When that longshoresmen’s strike in the PNW came on last year, it just sent a lot of our exports in a tailspin and our customers went elsewhere and we just never really picked that up. We are trying to evaluate the stocks-to-use ratio and where some of our exports are at.  We have spent a year or so learning all those numbers. We were surprised when the Ukraine and those former Russian republics became real serious competitors this year.  They have a freight advantage to one of our big customers, Egypt. We have had to step back and take a look at some things, such as how that affected some of the things we have been learning about and where we want to go. If we can get back to that $3.75 or so on Mpls. Dec. spring wheat futures, a lot of us would be locking in some futures fixed contracts. The basis is real strong right now.

“Some of the guys in our group are getting into raising alternative crops. We grow wheat, durum and barley with alternative crops like yellow peas, chickpeas, and lentils, canola and yellow mustard. We are 30 miles from the border so we also watch what the Canadians are doing.  All this has made our club focus on more than just wheat, and of course when you do that, you can imagine how many things you have to watch in the markets.  A lot of the pulse crops go to the Middle East, Southeast Asia, and India, so now with the threat of war, it has really put marketing those crops more difficult.”

— Grant Zerbe

For more information about marketing groups in Minnesota, contact Betsy Jensen, ag commodity instructor, Northland Community and Technical College, by email at bjensen@nctc. mnscu.edu or by phone, 218-689-5375.  In Montana, find more information online at www.montanamarketmanager. org, or contact Alex Offerdahl, Market Manager program coordinator, ph. 406-761-4596. In North Dakota, find more information about marketing clubs online at www.ag.ndsu.nodak. edu/aginfo/cropmkt/clubs/clubs.htm .