March is the month to move grain. Spring seeding is just around the corner and once the seeder is going, no one wants to take time to haul last fall’s grain to the elevator. March is also the month where the ground is (maybe) still frozen enough to haul before road restrictions are in place. So, that begs the question, is March the best month to sell grain. The answer is, well maybe… But selling and hauling don’t have to happen at the same time.
Grain marketing is a mix of art and science. There is no one perfect time to sell grain – there are certainly times when prices peak, but that isn’t the only factor. When selling (pricing) grain, farmers consider:
· Delivery period – Farmers consider when they will be allowed to haul their contracted grain to the elevator? This is important because of bin space and cash flow.
· Price trends – Farmers consider when, typically, the price for any given crop peaks. There are general cycles based on factors such as other worldwide top volume producing locations.
· Risk tolerance – Farmers consider their willingness to enter into contracts for crops that are not harvested (or sometimes even planted) yet. Some farmers are comfortable forward pricing while other farmers only sell crops that are harvested and in the bin.
· Contract variety – Farmers consider a variety of marketing tools at their disposal; various types of contracts are designed to minimize downside risk or capture upside potential. Growers must decide how much time they wish to invest in learning about various types of contracts.
Farmers must weigh a variety of factors when making their grain marketing decisions. So, back to marketing in March; strategic grain marketing (selling/pricing) and moving grain are not the same thing. Check back tomorrow to see some of the marketing sources we use at Vallotton Farms.