Why aren't grain growers better marketers?

Farm and Ranch June 1, 2010 When Mike Krueger of the Money Farm in Fargo, North Dakota, speaks overseas he says the producers there think American farmers are very sophisticated marketers, using all the risk management tools available to them all the time. Krueger doesn’t think U.S. grain producers are that good of marketers and at a recent ag issues conference he listed some reasons.

Krueger: “But I think the biggest reason farmers are good marketers and don‘t use all the tools is they simply don‘t want to do it. They don‘t like. They don‘t understand it and more importantly it is not a science.”

Krueger says farmers are always afraid of selling too low.

Krueger: “And the markets of the last couple of years kind of re-invented that whole fear. We came into the growing season of 2008, prices were starting to escalate and virtually every marketing advisor on earth was encouraging producers that you have to sell more corn, we are at four bucks. We haven‘t been a four bucks in six years. You go to sell more wheat we are at six bucks. We haven‘t been here forever. We have to sell more beans we are at ten bucks. What happened? They sold the 2008 crop too early. Prices exploded higher so they said by god I am not doing that again in 2009. Right?”

So farmers hung on as prices fell.

Krueger also believes that with farm programs providing a price floor and revenue products now available from federal crop insurance there is not that great a penalty to producers for making bad marketing decisions.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net.