When planning for the sale of their crops, grain farmers should use “realistic optimism.”
That was the message delivered Feb. 20 by Virginia Farm Bureau Federation Grain Division Manager Robert Harper during the 2018 Virginia Grains & Soybean Annual Conference.
Harper told attendees there are many factors that affect grain marketing, but farmers should start by “looking in the rearview mirror” to 2017.
Last year corn production was 176.6 bushels per acre nationwide, the highest corn yield in history, Harper remarked. And by Aug. 31 of this year 2.4 billion bushels of corn are expected to be left unsold, according to the U.S. Department of Agriculture. “We need to get that number down by increasing exports and using the corn,” Harper said.
Soybean production in 2017 was 49.1 bushels per acre, and the USDA estimates 530 million bushels of beans will be left unsold by Aug. 31. “We’ve got to get that number down too,” Harper exclaimed.
He recommended that farmers market their crops strategically by sticking with a simple, written plan.
“Nearly every marketing year offers one opportunity to lock in a profit with an average yield achieved. If you’re marketing strategically, you’ll be ready when that opportunity comes.”
He recommended that farmers who have grains left from 2017 determine a break-even price for them, set target sales prices and decision dates and offer “wish orders” to buyers. The highest grain selling prices occurred July 11 last year, “and that is when y’all are too busy to bother with crop contracts.” Harper suggested they lock in orders now.
There are several resources that can help farmers market their grain. The U.S. Commodity Futures Trading Commission distributes a report every Friday. “You need to get your hands on that,” Harper said.
Additionally, the USDA publishes a weekly export supply and demand report on Mondays and an export sales summary on Thursdays. It also offers a prospective plantings report on March 29 and a planted acreage report on June 29.
Despite pre-planning for grain marketing sales, Harper reminded farmers there are many “wild cards” affecting contracts. Weather, NAFTA negotiations, relations with China and the 2018 Farm Bill can all have an impact on commodity trading.
His last piece of advice was “Price early, and price often.”