Tips in Considering a Marketing Advisory Service

• First, evaluate if you need an advisory program, taking time you devote to marketing and your own marketing performance into account.
• Compare your price received for a crop to the price offered by the market.  You may wish to benchmark your comparisons based on average price and/or the top third of the price range. Your local elevator or an extension educator may have price information to help make comparisons.
• Evaluate consistency of a market advisory service. How consistently do their programs land in the top third of the price range over time? Don’t be afraid to ask questions; it’s your grain sales that are at stake.
• Available evidence suggests past price performance does not predict future price performance, similar to findings for stock mutual funds.  Implication: Choosing an advisory service based on past “hot” performance is not likely to be successful.
• Every individual farmer has a marketing philosophy, or style, that is unique, ranging from conservative and risk-minimizing to aggressive and risk-accepting. Marketing styles also vary dramatically across advisors. There is some evidence that more active programs generate higher prices, but tends to come at the cost of higher risk. Bottom line: match your risk tolerance to marketing style of the advisor. Research shows that match between farmer and advisory service style is second in importance only to pricing performance in selecting a service.
• Communication is important.  Market information from an advisory service should be well-written, concise, and accurate.
• Don’t focus solely on a service’s fee or program’s net price.  Remember, there’s value to how well an advisory service communicates with you and relates to your marketing style.
• Most market advisory businesses offer trial subscriptions to their services; if you’re interested, try them out.

Source: Scott Irwin and Darrel Good, University of Illinois Agricultural Market Advisory Services program.  Review AGMAS evaluations of corn and soybean pricing performance of market advisory services across the country online at www.farmdoc.uiuc.edu/agmas.