My husband finally asked me the question I hoped he would never ask: Am I your favorite farm management student? I reminded him that he is my favorite husband, but no, he is not my favorite farm management student. Although he meets two of the “favorite student” criteria; lives on a tar road and has no livestock, he does fail in the categories of being receptive to my recommendations and buys things if the banker says he can, instead of first determining if it is a good management decision. This last one is one of my pet peeves: “If you can finance, buy it.” From a farm management standpoint, it makes me want to scream. Does anyone remember the housing bubble and home mortgage fiasco?From his perspective, I am probably the worst farm management instructor he could have. While he is thinking new tractor, I am thinking new bathroom. There may be a conflict of interest in my recommendations.

Those same conflicts of interest also affect my grain marketing. I really, honestly, and truly believe that my wheat is worth $10. Does it know how much I spent on crop insurance? Or fertilizer? Or that it was lovingly sprayed with fungicide at exactly the right time? I am probably being too modest when I say the wheat is worth $10. I should probably say a minimum of $10.

Unfortunately the market doesn’t agree with me. And like a proud parent, I think too highly of my crop. Now that it is harvested and in the bin, I must become a price taker instead of a price setter. In farm management we often discuss cost of production, but those costs are currently irrelevant for the 2008 crop that has been lovingly tucked into the safety of grain bins. What’s done is done. The crop is produced and in the bin. Cost of production is relevant when determining what crops to plant, and at what price to forward contract, but it becomes irrelevant once the crop is produced.

So I look at the full bins, and wish and hope that wheat prices will rally, but I need to work hard to separate my conflict of interest. The wheat is worth what the market says, and not my own conflicted ideas. One of the easiest methods to keep you focused is to use technical indicators such as moving averages, RSI, chart gaps or anything with which you feel comfortable. Technical indicators are clean, without bias, and don’t care who is currently looking at them. A technical chart looks the same to me, as it does to a wheat buyer in Nigeria, and a hedge fund in New York. A chart is a wonderful source for unbiased opinion.

Another idea to try and eliminate your conflict of interest is to read non-farmer market commentary. Put down Prairie Grains, and pick up the Wall Street Journal. Many of the farm publications, radio and television, are staffed by farm kids, or even current farmers. I don’t want to call it a conspiracy, but there is definite bias. The same people who are writing that soybeans are going to hit $20, are also going to make a lot of money if soybeans hit $20. If they are not currently farming, they probably have a close relative or friend who is. It is easier to say what we want to hear ourselves, and no one likes being the bearer of bad news. Instead we stick to the positives; tight stocks, good exports, dry conditions, and forget about the negatives; likely increase in acres, strengthening dollar, and a wet forecast. Turn off AgDay, and turn on CNBC. They discuss commodities on that channel as well.

The final recommendation is to find that one guy at the coffee shop who disagrees with everyone, and actually listen to him. I know it can be hard, but get that second opinion, and listen to the naysayers. I enjoy working with farmers in marketing groups because there is rarely a consensus on where prices are headed. None of us know where prices are headed, and it serves as a good reminder to hear a dissenting opinion. Too often we join the “herd mentality” and if the consensus at the coffee table says that prices are headed higher, then we are more than willing to agree. Break away from the herd, and listen to the one naysayer in the group.

Go beyond your normal sources and comfort zone to get a balanced look at the markets. You can’t avoid many conflicts of interest, but try to recognize them when they arrive. The next time the coffee shop talk turns to higher wheat prices, take a look at the group, and ask yourself what their bias might be. Get skeptical. Ask for the other side of the story. And I’ll work hard to avoid conflicts of interest the next time my farm management student asks for a new tractor.