Commodity marketing is an art - not a science. Like anything, to do well at marketing you must enjoy it.
If you had to pick out a time during the year when most corn and soybean producers make the majority of their business decisions, it would be between the end of harvest and the end of January.
Decisions involving seed and chemical purchases, machinery purchases and, to a large degree, most marketing decisions and/or plans are laid out during this period.
As we go into this time frame, successful marketing is like many other aspects of life. It requires hard work and enlightened self-discipline. You must have a program or, more specifically, have a plan on how you're going to make decisions.
Successful marketing requires four things:
- Disciplined courage
- The energy to merge the first three properly.
Forget past mistakes. Those who brood over past bad decisions always miss the next opportunity.
Commodity marketing is an art - no matter what anyone tells you. Michael Jordan was an extremely talented basketball player and with practice and work he became great. An individual with no talent to play basketball will never become a Michael Jordan, no matter how hard he tries. Many people will never be successful at commodity marketing no matter how hard they try. You need to have a basic talent for this business, a desire to work hard and an understanding of marketing tools.
Bulls make money. Bears make money. Pigs never do. Translation: No one is ever going to be 100% right, so you shouldn't try to be.
Commodity marketing takes 100% concentration. If you're trying to do too many things at one time, your probability of being a successful commodity marketer is relatively slim.
While knowledge and experience are important, controlling emotions is key in the game of marketing. Knowing how and when to make decisions with controlled emotions is the single most important ingredient to long-term success in marketing for most farmers.
Identifying emotions: A couple of years ago we included the graph below, identifying the "Seven Stages of Marketing." I think it's worth presenting again. The faces clearly describe the phases. Almost everyone has been there at one time or another.
This past July and August, your neighbors who had stored corn and soybeans all year were clearly in the seventh stage. We're now likely at stage two. Most people will make very different decisions based on the same news depending on the stage of marketing.
Parting thoughts: Avoid the trap that will catch many farmers this year. Don't assume the loan program is the only game in town, or more importantly, that there is no way to win the marketing game. Marketing is more complex than it was six years ago. Today it's just as important to know how to pick bottoms (collect LDPs) as it is to know how to pick tops. Marketing now demands at least twice as many decisions as it did prior to 1996.
My guess is that we'll look back at this year's harvest as a good opportunity to LDP both corn and soybeans. Somewhere in the time frame from the first of December to the end of February there will be some good opportunities to pass on ownership of old-crop corn and soybeans. It will then be time to devote full concentration to marketing next year's crop.
Remember, you realistically have 24 months to market every crop: 12 months before harvest to 12 months after harvest. Fully utilize that time frame.