Cattle producers have enjoyed strong commodity markets for the last 18 months and most livestock economist indicate that ample opportunities could remain for the next 18 months, and potentially beyond. While the livestock sector is enjoying their record high pricing, row crop producers have seen the bottom fall out of their markets. World grain stocks remaining in storage, coupled with expect new crop production, have led to declines in market price for many of the cash grains. Reports from South America have been that the crop is not a record breaker but has been excellent none the less. While we have had challenges in the eastern corn belt, the main grain regions of the country are having ideal production conditions and are expecting to be happy with 2024 yields. Although this is not my area of expertise, most market commentary that I have read indicates that prices could decline further as we progress through harvest and into the new year.
No one can be certain of what opportunities our commodity markets will offer over the next 12 to 24 months. I can say that it will take a well thought out plan to help recognize when those opportunities present themselves. If you don’t have a written marketing plan, this is the year to create one.
Marketing plan not hard, but can be time consuming
Developing a marketing plan isn’t difficult, but it can be time consuming, at least the first time. The most important thing is to have something in writing that helps guide you through the marketing year calendar. This will allow you to track your progress and identify where you can improve for future years to make you a better marketer.
Typical plans begin with a statement of short- and long-term goals. This would include your cost of production, cash flow projections, needs related to business expansion and profitability, retirement savings, college expenses, and household needs. There are numerous tools to assist you with coming up with the “magic number”. You should utilize the OSU Enterprise Budgets, FinPack software, and the numerous on-line calculators for determining retirement and college savings needs. After you have identified your price goals, you should make a list of your resources. What is your expected production? How much on farm storage to you have? How much of your crop are you comfortable marketing in advance and how soon will you begin marketing the new crop? What marketing tools are you comfortable utilizing?
Next you should include a statement relating to your market outlook. We are all guilty of getting caught up in the “coffee shop talk”. While these discussions can be profitable, it is important to put in writing what you believe will happen. After all, this is what will guide your ultimate decision of whether or not to make a sale. Your market outlook can also include your “What if’s”. What will do if the market climbs above, or falls below, your expectations?
Finally, you can take all the information and begin identifying when to make your sales. This will include target dates, volume of product to market, and what tools you will utilize to make the sale. As an example you may say that you want to sell 10,000 bushel of corn by February 1st using a Nov HTA and a separate basis contract. As you make sales, record what you did, and provide an explanation of any deviations from the plan.
Do sales satisfy cash flow needs?
As you move through the marketing year, and at the end of your marketing year, go back and evaluate your plan. Determine if your sales satisfied your cash flow needs. Did the market follow your expectations? Were the marketing tools you utilized the best to “take what the market gave you”? End the end, your marketing plan is to guide you through your decision making process and provide you a tool to track your progress. Dr. Ed Usset from the University of Minnesota’s Center for Farm Financial Management generates a sample market plan for corn and soybeans each year. You can find these on their website at http://www.cffm.umn.edu/.
Programs in Rittman, Wooster, Beef Facility
There is an exciting line up of programs as we move into early September that I want to make you aware of. First is the Exploring Crop and Livestock Integration: Barriers & Benefits field night to be held at the Gish Barn in Rittman from 4:00 PM to 8:00 PM on August 22nd. The program will highlight research from the IDEAS project, directed by Dr. Doug Jackson-Smith from OSU, where his team compared the economic and environmental impacts of farms that utilized perineal forages and livestock to those farms that were row crops only. Dinner will be provided, and you are asked to register on-line at https://go.osu.edu/IDEAS24 or calling 330-263-3634.
The Wayne County Soil and Water Conservation District will have a Phosphorus Phield Day on August 26th, from 1:00 PM to 4:00 PM at the OSU Farm Operations Building located at 2600 Shelby Road in Wooster. The featured speaker is Dr. Manbir Rakker, who will discuss nutrient planning, soil testing and best management practices. It is asked that you make a curtesy reservation by call their office at 330-263-5376.
On September 4th, I will host a livestock forages field night and pasture walk at the OSU Beef Facility, on Apple Creek Road from 6:00 to 8:30 PM. The program will cover technologies for the measurement of individual animal water intake, the relationship between water consumption and forage intake, grazing behaviors of ruminant livestock, and pasture management. Reservations are not required but we ask that you make a curtesy reservation by calling the OSU Extension Office – Wayne County at 330-264-8722.
In addition to these programs, we have begun planning a full line-up of educational opportunities throughout the fall and winter season. These would include: OSU Ag Lenders Seminar, Store Grain Management Webinar Series, Small Ruminant Dystocia Management Clinic, Cattle Dystocia Management Clinic, 2025 Ag Outlook Seminar, Commodity Marketing Workshop, OSU Agronomy School, and our annual private pesticide applicators and fertilizer applicators recertification meetings. I would encourage you to keep an eye on our event calendar for OSU Extension – Wayne County at https://wayne.osu.edu for program announcements as these are finalized. As always, if you have any livestock, forages, or farm management questions, don’t hesitate to give me a call at 330-264-8722 or email me at yost.77@osu.edu
John Yost is an Extension Educator IV, Agriculture and Natural Resources, at OSU Extension-Wayne County
This article was previously published in The Daily Record.