A marketing plan

Farm and Ranch February 23, 2010 Jim Leifer, a crop insurance specialist with Fairfield-Waverly Insurance Agency in Rosalia, Washington gives seminars on grain marketing.

Leifer: “Basically what I am saying is plan you trades. Trade you plan. Have an exit strategy so any time you buy any type of a contract that is open on one end, like a futures contract or a call or put, have an exit strategy. Decide when you want to get out. If you have a hedge-to-arrive have an exit strategy. If you make 70 cents on the basis change get out of it. Do not be controlled by emotion. Be proactive not reactive.”

And you do that says Leifer by having a written marketing plan. You also must know your cost of production.

Leifer: “A marketing plan probably has to have two or three aspects. One is price. Your price targets. The other is sometimes we don‘t hit our price targets so we want time targets as well.”

Leifer says that historically on average, in years above your cost of production, pre-harvest selling in the March to May time period brings in 30 to 40 cents more than the price at harvest time.

Leifer: “So if can save a dime here and a dime there you may be able to double your net income at the bottom line. And that is what a marketing plan is supposed to do. It is supposed to help you be proactive, look at what historically is happening, set it up. You are never always going to be right.”

Leifer recommends every farmer buy a book by Ed Usset, that is U-s-s-e-t, out of the University of Minnesota called “Grain Marketing is Simple” and subtitled “It is just not easy.“

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.

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