As a producer, it is easy to look in the rear view mirror and say “I wish I would have.” Keeping in mind, you did the best you could with the information you had at the time; your decisions were likely sound. The market gave us some opportunities by way of a rally and shortly after took back the gift. Without a crystal ball, no one could know the market direction or when the rally would end. Fundamentally the market was not supportive, and as a rule, fundamentals will eventually take back the reins. Since the market seems very volatile, I thought it best to talk some marketing principles guaranteed not to fail you.
The Fundamentals of Marketing
- Know your break-evens and make profitable sales
- Sell your crop in percentages
- Use seasonal targets; they are less emotional than at-the-moment sales
- Be consistent, selling the same percentages pre-harvest each and every year
- Diversify and spread out your risk, selling incrementally and with different types of contracts.
- Think big picture and do not get hung up on one sale either good or bad. Simply look at total dollars generated (Average).
Sound risk management techniques are a must with the type of market volatility we have been seeing. It can be the difference between making a profit, or losing money.