The Best Time to Take LDP, Sell the Crop

The best time to take the LDP and the best time to sell the crop was analyzed in a study by NDSU, which analyzed crop prices and LDP rates for major crops produced in Cass, Ward and Stark Counties in North Dakota from 1998-2001. Among the findings:

Hard Red Spring Wheat—Highest LDP rates occurred during August-September. Marketing strategies that captured the LDP near harvest were the most profitable. The most profitable time to sell the crop was November.

Durum—LDP rates for durum varied depending on the time period, but marketing strategies that capture the LDP during harvest appear to be the most profitable.

Historical seasonal price patterns favor sales in November-December.

Corn—Taking LDP at harvest would have been the most profitable for all three years when marketing decisions are examined in the study period. Selling off the combine would have been the most profitable for the 2000 crop. For the 1998 and 1999 crops, storage until May was more profitable than selling off the combine.

Barley—August-September LDP rates were generally the highest. Capturing the LDP at or shortly after harvest was the best strategy. Cash sales during October-December were generally the best for feed and malting barley. Harvest sales of feed barley may have been the best in 1998 depending on the timing of harvest.

Soybeans—The highest LDP rates for soybeans varied considerably. They were the highest during July 1999 for the 1998 crop, during November 1999 for the 1999 crop, and during April 2001 for the 2000 crop. For the 1998 crop, they were significantly lower at harvest than at their highs. However, capturing the LDP at or shortly after harvest was the best strategy considering marketing decisions. Selling off the combine was the best marketing strategy for 1998, since prices declined considerably during the balance of the marketing year. Storage was profitable for the 1999 crop until May and for the 2000 crop until December.

Minor oilseeds—Since LDP rates and market prices move inversely, the most profitable strategy during the three years for oil sunflower was to take the LDP at harvest. The best selling strategy was to sell off the combine during 1998 and 1999. Storage into the summer of 2001 was profitable for the 2000 sunflower crop. The situation for canola was similar to that for oil sunflowers except for the 1998 crop, when the most profitable time to sell was January.