It's been said that over time markets change and fundamentals change. But one thing never changes — people. People still get bullish at tops and bearish at bottoms, and the emotions of marketing never go away.
After being in this business for 28 years, one observation in just the last few (and one that I don't like) is that the overall interest in marketing among farmers has declined.
Many in my age group, 50 and older (I hate to admit), can remember the days when educational marketing seminars were held frequently throughout the country and the attendance was large. I remember in the late '70s and early '80s my economist friend John Marten and I use to conduct 1½-day educational seminars on the market as often as we could find days to do them. I'd still be interested in conducting meetings like this, but there's not enough interest to justify it.
Why is this happening? Why is today's younger generation of farmers showing less interest in marketing than those of us with our AARP cards?
Personally, I think it's a combination of things. Many are convinced that marketing is no longer important because if prices go under loan rate they are protected by LDPs. Some are even convinced that if they buy revenue insurance they're guaranteed a profit anyway.
Both reasons are only “partial truths,” but some frankly don't care. As long as they can stay in business, making an extra 20¢ on corn or 30¢ on soybeans is not worth the effort and the agony of trying to understand marketing.
To be successful in marketing, like anything else in life, has to be fun for the person doing it. I think it's the most fun part of agriculture, but I recognize that my group is getting smaller as the years go on.
Parting Thoughts: Marketing can and should be one of the most important and fun aspects of running your farm business. Like anything else in life, however, understanding and having fun at it means having a thorough understanding of the process. It takes time and work to be successful at marketing. The sooner you start the learning process, the sooner you'll be able to reap the benefits of your hard work.
Tips For Better Marketing
No one is ever going to be a perfect marketer. You're not — and we're not. Those who keep looking for a Holy Grail will be looking their entire life. Nevertheless, here are some guidelines that we find helpful in making marketing decisions, and that I believe most successful farm marketers follow:
Know your cost of production.
Have a solid fundamental price forecast (not the coffee shop version).
Understand and pay attention to a valid technical system. Don't fight the trend.
Have a clear understanding of goals and objectives — among everyone who can second-guess your decisions.
Be willing to use various marketing tools. This means being willing and able to use futures and options as well as forward cash contracts.
Leave your ego somewhere else. Admit you're going to make mistakes. Plan on making many small mistakes. And once you make a mistake, don't dwell on it — move on.
Know when to forget last year's crop. Look ahead and not behind.
Recognize that marketing is an art, not a science. It takes a special talent to be good at this, and you must enjoy it.
If none of these characteristics fit you, admit it and hire someone to do your marketing for you.
Some of these you may not agree with, particularly No. 3. But it's important to understand technical analysis. (We have a good book that helps explain this for $10.) The saying, “the trend is your friend,” still works today like it worked 30 years ago.
Over the years many of us have also had some difficulty with point No. 5, using various marketing tools. Most farmers don't have the emotional ability to handle the swings in futures and options. Yet as I look back, many of the most successful years we had involved selling a year in advance in the futures market when the opportunity wouldn't have been there in the cash market.
Richard A. Brock is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report. For a trial subscription and information on Brock services, call 800-558-3431 or visit www.brockreport.com.