How understanding marketing tools can pay off

Farm and Ranch February 24, 2010 Recall the record run up in wheat prices in the fall of 2007? And many farmers had sold their wheat before prices took off, leaving several dollars a bushel on the table? Jim Leifer of Fairfield Waverly Insurance Agency in Rosalia, Washington, who does seminars on grain marketing plans, says some farmers who missed the market felt bad, others took action.

Leifer: “I know of a couple farmers, they were completely sold out by $5. And they said I think this market is going to take off. Because they knew the tools to use in a marketing plan they went out and bought some calls, a little bit out of the money. They netted over $4 for that call. So they took their $4.50 wheat let‘s say, added $4 they made by being proactive and come up with a $9.50 price. The neighbor just sat there and cried that I sold everything at $4.50.”

Leifer says that was a painful year because a lot of money was left on the table, but;

Leifer: “I told guys I sold crop insurance to that if you average $7 you did an excellent job of marketing. So don‘t feel bad about what you missed. The problem was the next year people wouldn‘t sell at $9 because they wanted $15 and ended up selling for six. The worst mistake farmers make is they try to sell next year‘s crop on last year‘s market. And that never works.”

Leifer says you not only need a marketing plan you need a written marketing plan.

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

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