|
Many of you may feel that way about crop marketing, and it is okay. Being a farmer involves wearing many different hats, from agronomist, to chief financial officer to human resource director. You enjoy some of
the jobs, but the others are right up there with a root canal. They should be avoided at all costs, and only done as a last resort. Unfortunately, the jobs that you despise, may just be the ones you need
to improve more than anything else, and will offer the biggest improvement to your bottom line. I would guess that crop marketing is high on that list for many of you.
The challenge I offer to you farmers is figuring out when to throw in the towel, especially when it comes to crop marketing. Personally, I cannot imagine someone else doing the crop marketing for my farm, but
that’s because I love it. Commodity marketing courses were my favorite in college, and I enjoyed my years as a commodity broker, well at least most parts of it. I did not enjoy working with farmers over the
phone, instead of in person, and I did not like the awkward silence from the farmer when I gave a recommendation he did not understand, but was too embarrassed to ask for an explanation. I knew I needed to
find a new job that allowed me to work with farmers face-to-face, and could take the time to explain the how’s and why’s of my recommendations. I hit the jackpot being a farm business management
instructor. Face-to-face interaction, and teaching courses on the how’s and why’s of commodity marketing.
But for many of you, it may be ” time to throw in the towel and hire a professional As much as we like to think of farming as a simple business, the reality is that many farms gross hundreds of thousands of
dollars, perhaps even millions, often more than many main street businesses. Farming is no longer a simple, small business, but one with skyrocketing land prices, rising commodity prices, and also rising input
prices. There are more dollars at risk today than ever before, and with more risk, comes the potential of more rewards as well.
I am here to tell you it is okay to hire someone to market your crops. It is okay to let go. You probably let go of your tax accounting many years ago. You may hire a crop advisor because you got
overwhelmed with the new herbicides, fungicides and changing nitrogen recommendations. Perhaps you hire someone to do your payroll.
crop marketing is suffering because you do not have the time or expertise to do it right, you may want to hire a consultant for crop marketing as well.
If you choose to hire a marketing consultant, it is still no excuse for not educating yourself on the how’s and why’s of commodity marketing. You still need to understand put and call options, basis fix
contracts, the implications of rolling a hedge to arrive contract, and the recommendations given by your consultant. I read many different advisory services, and there are times when I strongly disagree with
some recommendations. I am sure you are shocked and surprised to hear that I am quite opinionated when it comes to crop marketing, but even with a professional advisor, you still need a basic knowledge of crop
marketing in order to say “I disagree, and I am not comfortable with that recommendation.”
As for whom to hire, that is your personal decision. There are many great advisors out there. The only recommendation I have is that spring wheat growers should have someone who understands spring
wheat. We are a unique market, so quiz the consultant on protein discounts. If you hear an awkward silence on the other end of the phone, you probably want to find someone else. Also in the
Northern Plains are plenty of specialty crops such as sunflowers, dry beans, canola and barley, and your advisor should be aware of those markets as well. It is easy enough to find someone who knows corn and
soybeans, but if you are more than just a corn and soybean operation, you need a consultant who knows more as well.
For those of you who love commodity marketing just like me, there is no need for extra help. For those of you who rate commodity marketing right up there with a root canal, you may want to get a little help
making better decisions, and there is no shame in that. I think many farmers would rate commodity marketing as a major limiting factor in the success of their business. If you are in that camp, take the
steps to correct it, and that may mean hiring a consultant to help make better decisions
.
|
