5 Spring Tips to Get Ahead
There’s some comfort in routine right now. For producers, there’s another crop to plant, harvest, and distribute – and it all starts right now.
One thing that’s not routine, though, is making a profit. Challenging markets continue, and that calls for careful planning once again. Regardless of circumstances, here are five basic actions within your control:
- Stay safe
- Leverage your crop insurance investment
- Lower your input costs
- Maximize your grain marketing revenue
- Use the buddy system
In Episode 29 of In the Driver’s Seat, Doug Roose and Shelby Schweitzer from ADM’s Producer Marketing team talk with Austin Chester, Grain Origination Specialist in northwest Indiana, about how farmers in his area are already reducing their risk.
Here are highlights of the conversation:
Spring carries higher risks, especially around grain bins. As you hurry to empty out old crop, don’t get complacent around flowing grain and augers. There’ve already been tragic incidents this year and they tend to happen when producers work alone. Make sure someone else is with you when you enter a bin, lock out the control circuit whether or not grain is flowing, and use a rope and safety harness. It goes without saying, but nothing else matters if you lose life or limb.
Be Wise with Crop Insurance
Success is about optimizing margin per acre – yield and price together. If the market doesn’t give you opportunities to be profitable, revenue protection crop insurance is a good backstop. With the 2020 spring price guarantee set now and a good idea of your production costs, you can protect enough bushels to cover your costs, then venture into forward sales to try to beat the guarantee. ADM has a partnership with Crop Risk Services (CRS). Talk to a CRS agent or one of ADM’s own crop risk specialists about integrating your insurance policy with your grain marketing for better security.
Lower Your Input Costs
Fertilizer makes up about one third of your production costs and is ripe for cost-cutting. More and more producers are discovering significant savings from purchasing direct versus through a local dealer. ADM Farm Direct Fertilizer offers this option by eliminating costs in the supply chain and shipping products directly to you. ADM also provides market reports that help you lock in a price up to 18 months out. Buying now for fall application might be smart. Sign up for notifications of our monthly conference calls here and ask for details from your ADM representative.
Join the April fertilizer conference call:
Wednesday, April 15th
8:00 – 8:30 AM CDT
Phone Number: (872) 212-5260
Conference ID: 559885905
Start Grain Marketing
When there’s a downturn in the market, it’s hard to stay active with a grain marketing plan – but that’s when it’s most important. Given historical trends, April through June is typically a friendly price window for corn. During planting, though, it’s tough to watch the markets, so find tools that execute for you. One good option is offers, which trigger automatically. Another is ADM’s Average Seasonal Price (ASP™) contract, which earns the daily price over a set time frame. The ASP sign-up deadline for soybeans is May 15. Talk to your ADM representative about other ways to get some bushels sold without a lot of tending.
Find a Marketing Buddy
Working in a grain bin isn’t the only farm risk that calls for a buddy system. Farm decisions are also safer when you have an ally – otherwise it’s too easy to fall back on habit and emotion. Explaining your rationale to someone else makes you more deliberate, whether it’s your lender, accountant, or someone with expertise in grain marketing. At ADM, we start working with many producers before planting and adjust the strategy as needed to meet price targets and cash flow needs. We’d love to fill that “marketing buddy” role on your team.
No one single tactic is a silver bullet in farming today. Everything’s connected. Starting with safety, and integrating your crop insurance, input costs, and grain marketing is the clearest path to success. We wish you a prosperous 2020 and look forward to serving you!
Contact your ADM representative to get started.
To learn more about ASP and other strategies that execute while you’re busy in the field, see our Grain Contracts or contact your local ADM representative. For a broader introduction to grain marketing methods, see Grain Marketing Methods: a Guide from ADM.
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