Marketing Your Product

Teresa Olson
By Teresa Olson November 26, 2018 10:55

titan-search-button

Search All Titan Machinery Equipment

comparespecs-btn

Compare Case IH Specs

warranty-button

warranty-button

Spanish Btn

fae

fae

Spacer

 

camoplast

The preferred choice for farmers of Agricultural Tracks

Man using calculator at desk, backlit by sunshine through window, close up.

 

Recently, members of the American Bankers Association’s ABA Agricultural and Rural Bankers Committee provided a seven point tip sheet to help farmers and ranchers manage their risk.  Here’s a quick recap:

  • Know your break-even costs.  This should include input, debt service and family living expenses.  In order to get a better idea of what your yield might be, calculate your 3 or 5 year average; or an Olympic average (which means removing your high and low data for the last five years and averaging the rest).  You can also find estimated figures from your local university agricultural  extension service or an advisory firm.  An excel spreadsheet should be set up to track your costs.
  • When there’s an opportunity to profit, act on it.  When you understand your production costs, you have a better idea of when you can sell for a profit.  Even a small profit (because you’re not always going to hit the high) will take some risk off the table.  Don’t make the mistake of holding off for fear of a price increase or rally.
  • Set a goal and stick to it.  Set a date to have all of your marketing completed, plan to market 10% each month, or set goals to market one to three years out.  No one can be sure of what’s going to happen with agriculture’s volatility, but having an organized plan can help.
  • Take the emotions out of it.  The right person or company goes a long way here – a marketing advisory firm, local co-op and elevator programs or an in-house financial manager.  You need to find someone you trust and feel comfortable working with.
  • Keep things simple.  Without getting fancy, sticking to your marketing plan can help you stay in business.  Once you make a decision accept it and move forward – don’t beat yourself up later if the market moves one way or another.
  • Avoid spot markets.  Don’t wait until you’re pressed for cash or money to make a loan payment.  Doing so will leave you at the mercy of the markets at that particular time.  Keep track of your local basis and understand the advantages of forward pricing.
  • Understand the tools available.  Things can be complicated: hedge-to-arrive contracts, forward pricing, loans to cover hedging expenses and hedging lines of credit, and the role crop insurance plays, etc.  Ask questions in order to find the best plan of action for your operation.

I found a great reference tool for grain marketing terms that may be helpful:

https://www.extension.iastate.edu/agdm/crops/html/a2-05.html.

 

So when things seem to be a little slow this winter, gather your data and start a marketing plan.  You won’t regret it.

 

-Terry Olson, Titan Outlet Store Team

 

References:

http://northernag.net/AGNews/AgNewsStories/TabId/657/ArtMID/2927/ArticleID/9307/Seven-Tips-for-Farmers-and-Ranchers-to-Develop-a-Strong-Marketing-Plan.aspx

https://www.extension.iastate.edu/agdm/crops/html/a2-05.html

 

Teresa Olson
By Teresa Olson November 26, 2018 10:55
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment
View comments

Write a comment

Your e-mail address will not be published.
Required fields are marked*

Newsletter Signup

Newsletter Signup

Receive the latest in promotions, news, and more with our email newsletter.