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  • Writer's pictureJacob Kubela

Why Every Farmer Needs a Grain Marketing Plan

As a farmer, you know that running a farm is not just about planting and harvesting crops, it's also about making a profit. The most important goal of any farm business is profitability, and to achieve that, you need to have a solid marketing plan for your grain. In this article, I will explain the importance of grain marketing and why every farmer needs a marketing plan.

Grain production costs and prices have been on the rise in recent years, which means that knowing your breakeven levels, and understanding where you need to be making sales to keep yourself profitable is very important. A marketing plan is a roadmap that outlines your goals, strategies, and tactics for selling your grain. It helps you make informed decisions about when and how to sell your grain to get the best price possible.

One of the biggest benefits of having a marketing plan is that it helps you manage your risk. With a plan in place, you can take advantage of market opportunities when they arise and avoid selling your grain at a loss when prices are low. A marketing plan can also help you manage your cash flow by providing a clear picture of your expected revenue and expenses.

To develop a marketing plan, you need to start by understanding your costs of production and the market conditions. You should have a clear understanding of your break-even price, which is the price you need to sell your grain at to cover your costs. You should also be aware of the factors that can affect the market price of your grain, such as weather conditions, supply and demand, and global trade policies.

Once you have a good understanding of your costs and the market conditions, you can start developing your marketing plan. Your plan should include your goals, such as the price you want to sell your grain at, the amount of grain you want to sell, and a date by which you hope to accomplish the sale. You should also have a clear strategy for how you will achieve those goals, such as forward contracting, hedging, or using futures and options contracts.

It's important to note that there is no one-size-fits-all marketing plan for farmers. Your plan should be tailored to your specific needs and circumstances. For example, if you have a smaller operation, you may want to focus on direct sales to local buyers or co-ops. If you have a larger operation, you may want to consider using futures contracts or other hedging strategies to manage your risk.

Another important factor to consider when developing your marketing plan is timing. The timing of your sales can have a big impact on the price you receive for your grain. For example, selling your grain too early in the season could mean missing out on a price increase later in the season. On the other hand, waiting too long to sell your grain could mean selling it at a lower price due to oversupply or poor market conditions.

In conclusion, having a marketing plan is essential for every farmer who wants to run a profitable business. By understanding your costs of production and the market conditions, you can develop a tailored marketing plan that will help you achieve your goals and manage your risk. Remember, there is no one-size-fits-all plan, so take the time to develop a plan that works for you and your operation. Good luck and happy selling!

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