It never really ends – in fact, it’s a seamless operation; farming, that is. Marketing, in particular, is an aspect of the farm operation that should never fully be pushed onto the back burner. Keeping tabs on global, and not so global, news is important as you plan, plant, and, ultimately, harvest your production in preparation for sale.
“The first key to any marketing plan is to have a firm grasp on the costs of production,” says Sharon Ardron, farm management specialist with Manitoba Agriculture. “Knowing that means you know what you need to earn to breakeven and what it takes to start earning profits.”
Once the breakeven for every crop is figured, then each operation will need to take a long hard look at cash flow demands for the year, and match selling to those needs to ensure the business is not caught short meeting loan payments, input purchases, bills, or other significant draws on farm cash.
By doing both of these things, any grower is well on his way to a good marketing strategy for the year, armed with those key financial metrics.
The options to actually sell the crop are many. From cash sales off the combine to forward contacting with a number of different types of contacts to dealing with a professional to assist you in managing the process throughout the year. “Some growers are hiring marketing firms to help develop strategies and bring discipline and expertise to the process,” says Ardron. “Other growers feel very competent in their own skills and manage 100 percent of their own book. And do very well.”
No matter which approach you take, taking a vacation from informing yourself of the global market is not advised. Having a good grasp of what is happening in those countries that compete against your production is helpful to understanding what is happening in your local area with basis levels, or pricing overall. Knowing the “lay of the land” can be beneficial in avoiding common pitfalls – like holding out for the top of the market or not recognizing when the price is not going to stop falling. Recognizing risk and being in a position to take advantage of opportunities means you’ve done a good job with your plan.
Seek out good sources of information. Using social media in the growing season can keep you plugged in. Use the winter to attend meetings, network, and get informed in a more hands-on way. There are private, fee-for-service sources of information and there are sources that are free – your local grain elevators will be plugged-in to what’s going on through their grain merchandizers in head office. Government sources are easily accessed. Some growers band together and share their learnings in regular meetings.
It’s important to ensure you approach your marketing strategy with the same discipline and rigour as you do the agronomic side of your business. In so doing, you are setting you and your farm up for success.