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“Farming is a marathon and not a sprint,” says Don Villwock, Edwardsport, Ind. “We must focus on taking profits when the market offers us that opportunity. We subscribe to the old adage that ‘Bulls make money, bears make money, but pigs get slaughtered.’”
By managing his corn pricing in a conservative but prudent manner, Don Villwock normally hits his target of being in the top-third of the year’s marketing price. He uses the newest marketing tools like short-dated new-crop options.
Villwock’s family farms out of southwest Indiana at Edwardsport. However, he doesn’t make daily trips to the turn row. He plans from his downtown Indianapolis office, where he’s president of the Indiana Farm Bureau. Farm policy is as much on his mind as grain prices.
“I delegate to my market advisor with more expertise,” he says.
His no-till operation normally features a 60% white food corn and 40% soybean seed rotation.
Kurt Koester, president of AgriSource market consulting in Des Moines, Iowa, is Villwock’s marketing consultant. “Villwock counts on a lot of singles and not home runs in making profitable sales,” Koester says.
“I’ve been in contract marketing 15 years,” Villwock adds. “We buy a lot of puts to protect our positions when we can take a profit. That will keep us competitive if we do our best to raise top yields while controlling costs.”
White corn normally nets Villwock an extra 70-80¢ bu. through a stronger basis. “We’re about 50% sold in corn, through a combination of contracts,” he says.
“They’ve been cash contracts at $6.80 to $7 (55¢ over futures, one for 65¢ over and one is about 80¢ over).”
To supplement those contracts, he bought short-dated new-crop put options, first offered this year through the CME Group CBOT. Puts were in the $5.40 to $5.60 range costing 10¢-20¢ per bushel. “I lifted them in June after continued uncertainty over planted acres and got most of the cost back,” says Villwock.