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In the Buddy Seat: Put Your ADM Rep to Work

Jessica Alderson shares how to collaborate on strategies to widen your margins.

What do you call the extra seat in your farm machinery? The jump seat? The nav seat? Some call it “the buddy seat.” Whatever term you use, this is the place a ride-along can sit and keep you company, chatting about the day’s concerns.

While you own control of your farm, your agronomist, lender, and accountant all occupy the buddy seat from time to time. When it comes to navigating the markets, ADM would love to earn a place beside you. Markets are our specialty—for selling grain or buying fertilizer at advantageous prices.

How do you get marketing and input solutions tailored to your farm? In our latest podcast, learn the secrets of a productive “buddy” relationship from Jessica Alderson, ADM’s Territory and Origination Manager in Nebraska. Alderson went to college to be an ag teacher—but found it more fulfilling to educate and learn from producers one-on-one.

 

Alderson says that in this year’s markets, strategizing with your representative is more important than ever:

“In the last few months, we’ve had a lot of things change the market, from COVID-19 to trade tensions, so growers have a lot on their minds,” says Alderson. “For many of them, this is one of the toughest years for marketing. Some did a good job of selling grain in December, January, February and since then the market’s taken a nosedive, so people are wishing they’d sold more. The flip side is that input costs are relatively high.”

From her own experiences helping producers in Nebraska, Alderson gives three tips for getting more out of a relationship with your local ADM representative.

  1. Don’t be afraid to share your goals. Be open with the price targets you need for profitability. This equips your representative to match you with the right instruments at the right times.

“We talk a lot about profitability,” says Alderson. “What’s profitable for one might not be profitable for another, so I like to ask questions: ‘Tell me where you need to sell in order to be profitable today. How about down the road? How does that factor into your 5-year plan’?”

Using that information, Alderson was able to help one producer achieve a 30-cent premium over the market on about a third of his anticipated soybean yield. “He ended up using a Price Accumulator contract,” she explains. “He really liked that strategy, because it not only had a price guarantee, but also had a price level he was really happy about. We still need to execute on another 30% of his grain to get where he wants to be, but this contract gave him the opportunity to manage some risk and look to March and May of next year to figure out where we need to sell his bin bushels at.”

  1. Connect inputs and marketing. Take advantage of forward prices on fertilizer at the same time you make grain sales—to potentially be more profitable.

Buying lower and selling higher is the secret to success in any business. With fertilizer making up one-third of typical input costs, there are big margin opportunities in buying nutrients direct from the source. This program, ADM Farm Direct Fertilizer, is available through many of the representatives who also buy your grain.

“There’s a lot of money that can be added back to a grower’s pocket by buying fertilizer when it actually makes sense,” says Alderson. “Generally speaking, fertilizer has been a buy-when-you-need-it type of product—but it’s really traded as a commodity on the global market, similar to grain. There’s a global market that actually trades daily. What ADM Farm Direct gives you is the market information and the ability to price fertilizer up to 18 months in advance. When you think about forward-marketing your grain and buying a third of your inputs together, you have a more realistic view of your margins.”

  1. Be willing to trial new solutions. Better farm management methods are coming out every day. Test their value on a small scale first.

You’re right to be wary about change. No solution works well for every operation. Ask your ADM representative to set you up with a small trial to demonstrate the value of a new idea before you scale it up. One of Alderson’s grain customers did this when jumping into ADM Farm Direct Fertilizer.

“The agronomy piece is vitally important to growing a crop, so the producer needed to know ADM could service them in the way they’re used to,” says Alderson. “They started by buying one or two loads of our fertilizer and once they realized we really could take care of them, those two loads ended up being more. They were really surprised and extremely happy with the service, especially with the forward-pricing information. It created this dialogue of market information on grain, market information on fertilizer, and the opportunity to get educated on decisions affecting the bottom line.”

What do these three tips have in common? A relationship. Think beyond one-and-done transactions to full collaboration with your ADM representative. Let us prove we really do have your best interests in mind.

“Trust and respect are incredibly hard to earn,” says Alderson. “That’s why I try to treat my customers the way I’d want to be treated if I were in their shoes. We know you’re farming not only to make a profit, but to also make a difference in the world. Any one of us riding along with you wants to help.”

 


Learn More

Time with your local ADM representative is free and you’ll leave with an array of ideas for your personalized strategy. Reach your local office here. We’d love to talk. Let’s collaborate on strategies for better profitability.

ADM is providing this communication for informational purposes, and it is not a solicitation or offer to purchase or sell commodities. The recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. The sources for the information and recommendations in this communication are believed to be reliable, but ADM does not warrant or guarantee the accuracy of the information or recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication. The information and recommendations in this communication are subject to change without notice.

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