By Carroll Smith
A conundrum is defined in a couple of different ways. For example, it can be a riddle solved by a pun, such as: When is a door not a door? When it is ajar. Or, a conundrum can be an intricate and difficult problem.
In today’s grain marketing arena, the definition of a conundrum is the latter. The dynamics of our current domestic and global economic situation have turned traditional market signals upside down. Or rather, how farmers should react to traditional market signals.
Even market analysts don’t pretend to have a crystal ball these days. Just ask them.
Question: When is our dismal economy going to turn around?
Answer: Don’t even go there.
Question: When are grain prices going to trend upward again?
Answer: Your guess is as good as mine.
Question: If I have stored grain, when should I sell it to realize the best price?
Answer: I’ll just pick a day for you, and if you get paid the best price, we’ll both be surprised.
This ficticious dialogue isn’t intended to be a market analyst bashing session. Instead, it’s meant to reflect the frustration felt by those at both ends of the marketing stick. However, despite the many negatives in the grain markets, there are some positives. And, some strategies do exist for a decent grain marketing game plan.
To understand what I am talking about, I encourage you to read “Decisive Marketing” (Page 16). The article is written by Melvin Brees, market and policy Extension associate with the Food and Agricultural Policy Research Institute at the University of Missouri. It is an up-to-date, comprehensive discussion about corn and soybean prices, ending stocks and potential strategies for stored grain.
At one point, Brees notes, “Price targets and selling decisions may need to be planned according to when cash is needed and on the financial ability to bear risk.” In my opinion, he offers some sound advice following that particular statement. He also cautions that “there are not any easy answers.”
And, to add to Brees’ statement, we still have to live with some unknowns. However, putting together a marketing game plan that best suits your individual situation has to be better than having no marketing game plan at all.
If you have comments, send them to Corn South, 5118 Park Ave., Suite 111, Memphis, Tenn., 38117. You may also call (800) 888-9784 or contact Lia Guthrie at firstname.lastname@example.org or Carroll Smith at email@example.com.