Many farm leaders say that marketing their crop is one of the most challenging things that they do. In all types of markets, thoughts of uncertainty about what may happen — and sometimes even anxiety or fear — are common.
In a volatile market as 2021 has proven to be so far, those feelings can be multiplied exponentially. Depending on factors like how you typically approach marketing plans, decision-making and your personality type, you might find you’re more inclined to make moves or simply freeze with indecision.
What You Need
The most important thing you can do to be ready to make good marketing decisions for your operation is to first have and know the right information about your operation. That’s right: I didn’t say having information about the market, but about your own operation.
A farmer could have tons of information and analysis of the markets at his or her fingertips, but if they don’t have the key financial data they need about their own operation’s status and needs, it won’t make much of a difference.
Here are three questions to ask yourself as you consider how you’ve been approaching the 2021 market so far, and how you want to move forward in the future.
1. Do I have the right financial information about my operation? Having updated financials on your farm is key, including breakeven costs and projections. Having a clear handle on your farm’s financial situation can help you take some of the emotion out of the marketing decision-making process. That’s even more important in a volatile market like 2021 because when prices are high, emotions can run even higher.
2. Have I run scenarios around what may potentially happen? No one can know for sure what will happen in the market but thinking ahead about potential market scenarios is a smart move. Prepare by running different scenarios using your farm’s numbers or work with a market adviser.
3. What is my marketing personality type? Just as there are different human personality types, farm leaders can have different marketing “personality types.” The most important thing is to know your own marketing tendencies so you can recognize if your tendencies may be working against you in some situations. Some are more inclined to heavily analyze a situation to the point that they run into “analysis paralysis” and become unable to make a decision at all, while others might charge forward without really thinking things through and later experience regret. No tendency is “wrong”; it’s just helpful if you can recognize it in yourself and try to counter it.
Three Final Ideas
These ideas can help as you work toward marketing plans and decisions that are best for your operation.
1. Build flexibility into plans. Especially when markets are volatile, a flexible, adaptable plan is key to allow farms to take advantage of potential opportunity. Having a flexible plan and working to take a flexible mindset can be helpful when it’s time to make decisions, especially when there’s limited time or information. Thinking or talking through a variety of market scenarios ahead of time can also help because you’ve already worked through it in your mind.
2. Keep your eye on the ball. It can be difficult, especially during the growing season, to give the type of attention that a volatile grain market requires. But it’s absolutely key to stay on top of what’s going on in the market in terms of trends and new information that’s impacting it. Carve out specific time for yourself or someone else in your operation to devote to analyzing market information beyond seeing or hearing daily price quotes.
3. Don’t go it alone. When the market is soaring at higher levels than usual, it’s even more important to make sure that your farm’s marketing plans and decisions are tailored and targeted specifically to your unique operation and its specific business goals. Sometimes that can be tough to do alone, or even with a small group of leaders on your farm.
If you’d like to discuss more about your marketing personality type and plans, get in touch with our group of market advisers, or find a free trial of our marketing information service by visiting www.waterstreetconsulting.com.