Dr-Jim-Mintert-on-grain-marketing-in-2020
If you want to become a better marketer of your grain, the Purdue Center for Commercial Agriculture has tools for you and workshops around the state starting in February. Center director Dr. Jim Mintert provided an overview of those tools and marketing options at the recent IN Farm Equipment and Technology Expo as part of his market outlook and profiting in 2020 presentations.
Using the Purdue online basis tool helps farmers see the basis patterns and history in their part of Indiana.
“Our analysis would suggest basis history is the best way to forecast basis,” Mintert said. “On the corn side our models were suggesting a 3-year average of past history is your best forecast for the future for that particular time of year and that location, and the soybean side it’s either a 2- or 3-year average of basis history for forecasting. What that allows you to do is really think about if I placed a hedge in futures, if I sold futures at today’s price level, what net price, what actual sale price am I effectively locking in?”
Mintert wants producers to think about what the futures market is offering a least once a week. It can help you become more of a marketing manager than just a price-taker.
“Force yourself to sit down and think about what are futures today,” he told HAT. “If I localize that with the basis forecast, what does that price level look like and how does that compare to my budgets? When you’re looking at it from that perspective, you’re starting to think about how to manage your cash flow. You’re starting to think about when you need to make sales to manage cash flow and you’re also thinking about those price levels and whether they are going to be attractive enough to meet the cash flow projections you had outlined when you put your budgets together.”
Mintert also recommends looking at your marketing from a portfolio standpoint, and possibly adding strategies to your current portfolio. Hear more in the HAT interview by clicking play on the audio player above, and learn more at the workshops in Vermillion, Dubois and Wells Counties early next year.