To Make Grain Marketing Decisions, Listen to Your
“ Voice of Reason ”

By Betsy Jensen
Ag Commodity Instructor, Northland Community and Technical College, bjensen@nctc.mnscu.edu

The “Voice of Reason.” We all have it.  I believe our success in life – as well as farming and with grain marketing – is determined in great part by how much we listen to this voice of reason.  It’s the voice of reason that whispers to us at an auction sale, “That tractor isn’t worth this much, stop bidding.” It’s the voice of reason that tells us, “It’s too wet in that pothole, plant around it.” And it was the same voice of reason that told us last fall, “Wheat is worth almost $5, SELL.”

Did you listen?

A lot of people didn’t listen to the voice last fall, myself included. I am proud to say that some wheat was sold, but there is still wheat in my bins, and I know I’m not alone. 

We all heard the voice of reason, but we chose not to listen.  We can now ask the question, “Who, in their reasonable mind, would not sell all their wheat for $5?” I can honestly say a good percentage of wheat farmers were not in their reasonable minds. 

As we look ahead to 2003, we need to make a commitment to, “Stay in our reasonable minds.” We know the marketing rules. We know what the markets often do from spring to fall, but we also have bad memories of early 2002 sales to cloud our judgment.  When making marketing decisions this year, we need to ask ourselves, “What would a reasonable person do?”  Even if you don’t consider yourself a reasonable person, this may be the appropriate time to begin, or at least pretend. 

What do I think a reasonable person should do this year? I think reasonable farmers should buy some sort of revenue insurance such as CRC or RA-HPO and then make some spring sales.

Revenue insurance will cover you if prices rally from spring to fall, and a crop failure means you don’t have enough bushels to cover your spring sales. A crop failure is painful enough, but when you have to write a check to your elevator, the pain is even worse.  Revenue insurance won’t take away all the pain, but makes it bearable.  I know for a fact that it saved many farmers a lot of pain in the last growing season, when they couldn’t deliver any bushels on their contracts because of a crop disaster.

I also believe reasonable people should sell a little bit this spring. I know it was a horrible decision last year, but I’m still a firm believer in spreading out your risk. Don’t sell 100% this spring, and don’t hold 100% for the fall. The amount you sell is a personal decision, but contract a few bushels before you start planting.

I know, I know, listening to the voice of reason can be boring.  It’s the stories of extreme, bold actions, not of reason, that are most savored to hear and to tell down at the coffee shop.  Listening to the voice of reason, you’ll never see pictures of your four-wheel drive tractor buried in mud up to the axles hanging at the elevator.  You’ll never be the subject of, “remember the time when so-and-so” stories that float around town and that seem to be passed down from generation to generation.  Hopefully, however, the voice of reason will help guide you to safer and better paths over the course of your professional farming career. Isn’t that the ultimate goal?

Jensen farms with her husband Brian near Stephen, Minn.  Her market education activities including this column are supported in part by the Minnesota wheat checkoff, directed by the Minnesota Wheat Research and Promotion Council. If you have a question or topic related to marketing that you’d like to see addressed in this feature, call 1-800-242-6118, or email Jensen: bjensen@nctc.mnscu.edu .