AgCountry Farm Credit Services / Prepare / December 2021
PREPARING FOR
2022 Written by: Katie Tangen,
Marketing Education Specialist
The winter season is upon us. With it comes preparation for the future. It’s a time to prepare production records for the last year. It’s a time to prepare your books for a visit to the accountant or tax preparer. It’s a time to tie up any other loose ends before the calendar flips to 2022. One item that is often overlooked is drafting an initial marketing plan if you haven’t already started making sales. With so many decisions to make, here are a few reminders about what might need to be done to market your grain most effectively: 1. Before you draft any marketing plan, think about what your shortand long-term goals are for your operation. Do you want to set yourself up to purchase more land? Are you in the process of winding things down to transfer to the next generation? These goals will impact how you approach the next tip. 2. How much risk can you tolerate? Every producer is going to have a different answer to this question. By nature, some people
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have a stronger appetite for risk than others. Younger farmers generally are going to have less tolerance for risk as they develop and grow their balance sheets. Farmers at the height of their career are likely to be more comfortable with more risk. Those looking to retire in the near future may have different goals depending on their transition plan. Once you recognize where you are, you can better pick which tools you want to use in your marketing plan. Some tools you may have used before while others could be a new method. 3. You need to understand the tools available. Just like seed companies come out with new hybrids and chemical companies come out with new products and methods, new grain marketing tools arrive all the time. Next year might be a good time to try something new. But before you do, make sure you understand how the contract works. If you always do cash contracts, try setting the basis or futures first. If you’ve always wondered about options, open an account and try it on a small part of your production this year. In the past few years, various private insurance products have also been offered that can help you ensure a minimum price on a portion of your production. Not every tool is going to be appropriate for every person and every situation, but if it looks like it might be a fit, try it. 4. Post-Harvest Marketing Plan: This is probably one of the most underutilized tools. As long as you’re reporting your production and finalizing bills, now is a good time to figure out what your true break even was for the previous crop year. Take a minute to examine your decisions from this past year. What did you do well and what could be better? Hindsight is always 20/20, and we aren’t
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