Each year, the Testing Ag Performance Solutions farm management competition brings new competitions, new participants and new learning experiences.
In 2019, Nebraska Farmer field editor Curt Arens and I participated for the second time in the TAPS program — this time in the subsurface drip-irrigated (SDI) corn competition.
Of course, as an ag editor, making farm management decisions is always an eye-opening experience for me. It gives me an opportunity to walk in a farmer's shoes and actually make decisions, rather than just writing about them. And one of the biggest challenges the past two years has been making these decisions in an informed way while also reporting, writing and meeting deadlines.
This year, however, yielded some new takeaways after phone interviews with the winners of the most profitable award from each of the three TAPS competitions.
In a related article, Chuck Burr, Nebraska Extension educator and one of the organizers of the TAPS program, noted there was a range of more than $1 in the corn futures price throughout the year, providing ample opportunity to lock in a profit. That includes a run-up from about $3.50 in May to closing above $4.50 for several days in June.
The teams that were most profitable in each corn competition took advantage of this — a common thread among all of them was marketing in bigger increments. They identified a benchmark to sell, and when that benchmark was reached, they had a previously agreed upon number of bushels they planned to sell. If prices rose after that, they still could rest easy, knowing they already had locked in a profit.
Interestingly, both winning teams of the most profitable award for the SDI corn and pivot-irrigated corn competitions purchased no crop insurance. One team member explained that the greatest risk was from hail, and although North Platte, Neb., is arguably one of the most at-risk locations in the U.S. for hail, the likelihood of three small plots (totaling a half-acre or less) being devastated by a hail event is slim. And, the team member pointed out, the risk is much less in a drip-irrigated field.
That's something the Nebraska Farmer team figured out after 2018, but when 2019 came around, we still opted for revenue protection to provide some peace of mind in marketing.
Still, I think it's fair to say we could've borrowed a page from the other competitors' playbooks — mostly, knowing upfront what your costs are (which is somewhat feasible in a competition like this), knowing where your breakeven is, what price you need to reach to profit, and seizing the opportunity when it arises.
There's also something to be said for marketing in large increments. You may see prices rise later, but you can rest easy knowing you sold a large percentage of your expected production at a healthy profit.