It was mid-July and corn jumped $2/bu. over early June. That $7.40 would yield a sweet profit. But drought-driven $9 was “guaranteed” around the co-op coffee pot. Your co-op buddies just knew it. So did some pro analysts. When it pegged at $8.40+ about Aug. 10, you weren’t going to be the one who sold too soon. And in late September,when corn was back down to $7.40, you were still unsold. And you still weren't when it rebounded after the mid-October crop report and closed at $7.65 on Oct. 19.

Score another one for ego eroding common sense. Greed of wanting the top andfear of not getting it has left too many growers with corn or beans unpriced in a volatileenvironment.

Fear of coffee-shop ridicule “rears its ugly head every time prices are at this level,” grimacesChad Hart, Iowa State University Extension grain marketing specialist. “Some didn’t move when it was the highest. They want tosay they hit those high prices and not face criticism. They let good profit opportunitiesslip by. Remember that $7.40 and $15-16 are great prices. Just because you don’t get thehigh, don’t cry over spilled milk. It’s gone.”

Jim Hilker, Michigan State University Extension economist, says egos canstill get in their way. “I think guys are doing a better job of handling it,” he says. “Guys started pricing beans at $13 back in April because it was a good price then. Whether those decisions were good or bad “depends on the individual farm. If youpriced all of your beans at $13, I’m not sure if that was a good price. But it was a goodplace to start.”

Hilker reminds growers that if not for the drought, a normal crop year would havelikely made $13 “a good-looking price.”

 

Don’t lose a profit

When prices are high, such as beans in the mid-teens, bookthe sale if it’s a good profit opportunity, despite what others may say. “Let’s not give it away,” Hilker says. “The bean market dropped a buck and a-half in seven days in September.”

The drought pressured more growers, not just those worried about coffeetalk. “A lot of people who sold beans at $13 wanted to make sales at the higher levels butweren’t sure about their yields,” Hilker notes. “If they’re still bullish and have beans orcorn to sell over what they’ve already contracted, considering selling at the current price,then use 2013 futures or options strategies to stay in the market.”

Chris Hurt, Purdue University Extension economist, says more risk-managementdecisions are made by younger growers. In multi-generational farms, younger producers mayhave thicker skins that repel peer criticism. “Stories still get told in the coffee shops,”Hurt says, “but decisions made are a lot more sophisticated.”

Social media and smartphones, with real-time information, plugs growers into buyers, he says. “They have connection tomuch broader analysis and factual information.”

Hurt says there will always be “traditional farmers who may still rely on their ‘old time’ social media at the coffee shop. “Twenty years ago many farmers were speculators, trying to pick the moment. But a vast majority realized they weren’t experts at picking the highs, and that even experts are wrong plenty of times.”

 

Stick to a marketing plan

“Farmers sometimes kick themselves for early pricingwhen prices go up,” Hart says. “But it’s their job to take opportunities to cover their costsand make a profit.”

So the next time you’re on that second cup and old loud mouth says, “Corn’s upto $8. Bet you wish you hadn’t sold at $7,” shield your ego from greed and fear. They don’t make a good threesome.