I have always been a bit of a sports guy. I was not that good at them, but I enjoy watching football, basketball, baseball and rodeo. Last night, I watched a little bit of the 2024 NFL draft. I was intrigued by two completely different thoughts.

Some of the smartest people in their field will weigh in to determine how to get the most value. Sometimes that involves being aggressive and taking chances and sometimes that means staying conservative and trading away high draft choices to accumulate more mid-round picks. Neither strategy is necessarily incorrect at the moment, but time will always have the answer.

As a broker, analyst and consultant, I often work with producers that fit into those same types of general managers. Some are extremely aggressive and willing to take chances in an attempt to hit a big score. Others tend to use a more conservative approach, limit margin call responsibilities and take off small chunks of risk periodically. Lastly, I sometimes work with producers who do not have a strategy. These are the most difficult to help as their strategies tend to change with the year, the month and even the day at times.

Sign on to a strategy

The key to an effective marketer is to have a strategy and stick with it. A one-sized-fits-all strategy does NOT exist when it comes to grain and livestock marketing. Every operation is different in size, scope, debt-load and risk aversion.

Whether you work with a consultant or a broker, or choose to market your crop on your own, these are all items that you need to think about and weigh how they affect your marketing plan. I am sure that NFL teams plan out their draft strategies in much the same way.

Just like grain and livestock markets, drafting an NFL player has a lot of unknown risks. How will the young man handle fame and fortune? How will they handle the speed of the professional game, and will they fit the team? Scouts and organizations can spend all the money and resources they want analyzing film and workouts, but how the player responds in the future is always unknown.

Grain and livestock markets face the same uncertainties. Sure, as of right now corn and soybean carry-outs are poised to push higher in the coming year – over 2 billion bushels in corn and 600 million bushels in soybeans. But what if the rains do stop in May? What if demand from China does pick up this summer? What if the Biden Administration gets aggressive on its bio-fuels policy? I do not have the answer to any of these questions. As with draft picks, time will tell.

So how do we handle those unknowns? We believe the key is to remain flexible in your marketing plan (use option strategies). Flexibility does come at a price, and when we are wrong, we will wish we had not paid for it.

But when we are right, flexibility comes in handy. And just like Ryan Leaf, JaMarcus Russel, Ki-Jana Carter and a host of other draft day busts over the years, time will tell.

One last thought on how NFL drafts are like my life. Smart money knows when to walk away from a bad draft day decision. Sometimes, we must know when to walk away from a poor marketing decision. And sometimes, that poor marketing decision was choosing not to decide in the first place.

Please feel free to call Schau directly at 701-987-6009 or anyone with the AgMarket.Net staff at 844-4AG-MRKT.

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