In the late 1990’s while attending college at UW-Platteville, I was a starting mid-fielder for the women’s soccer team. To play this position you had three jobs: defense, offense, and ‘don’t stop running!’
One particular late summer during “two-a-day” practice, I absolutely thought I was going to die. The morning training session consisted of a 6-mile run through the hilly community and campus that is Platteville. The afternoon session was an intense 2-hour practice filled with sprints, and ball handling drills.
Finally, at 5 p.m., in the late afternoon sun and 90-degree heat, our coach tweeted her whistle. “Thank goodness,” I thought, “it’s over.”
Nope. Her voice then shrilled, “To the hill!”
The hill was a half mile from the practice field. There was no John Deere Gator to take us there. There was no walking to get there. We had to jog there.
Mind you this “hill” is the stuff of legends. The Chicago Bears used to have their summer training camps in Platteville. The famous Walter Payton himself even wrote about this “hill” in his book. This is the same hill that Bo Ryan, the former head basketball coach at UW-Madison, made his players run while he was the men’s head basketball coach at UW-Platteville. This hill is steep. This hill is brutal. This is a vomit-inducing hill. That afternoon we ran it TWENTY times.
While I did think I was near death in that moment, I survived. I was horrifically sore the next day. I cursed a few times under my breath at practice the next morning. But I kept going. One foot in front of the other. That’s all I could do. That was all I could control.
I think back on that two week pre-season and what I accomplished physically, mentally, and emotionally. It was that moment and that experience that instilled in me drive, desire, tenacity, toughness, and determination.
And while the hills of Platteville and a college soccer experience are quite frankly “nothing” when compared to what American agriculture is enduring today, there may be a few parallel lessons to draw when it comes to grain marketing.
1. Defensive grain marketing
Over the past few weeks, grain prices have overall, been grinding lower. Absolutely this is due to the effects of COVID-19, uncertain demand potential here in the U.S. and around the world. As I wrote about a few weeks ago, seasonally, grain prices also have a tendency to grind lower during late March and April. In times of uncertainty, more often than not, the path of least resistance for prices is lower.
Many producers likely made cash sales or implemented various put option strategies to defensively provide lower price protection in recent weeks. Looking forward, unless the USDA throws us a surprise in the April WASDE report, it seems likely that grain futures prices may continue to grind lower in the days and weeks ahead.
While you have been successfully playing defense in your marketing strategies, it is time to start thinking about scenario planning for where and when a price low might occur.
2. Offensive grain marketing
The question I’m hearing most recently is, “Will this grain price ever rally again?” The answer is yes. When, or how high is of course the question.
Remember the old saying, “low prices cure low prices.” At some point grain prices will indeed rally. There will be a weather scare. There will be a demand rush. There will be a supply fear. What you need to be thinking about now is when might that rally occur, and what will you do to take advantage of that price rally? Is it in your best interest to start thinking about re-owning grain and placing open orders to buy corn or soybean call options in the coming weeks?
Seasonally, corn and soybean futures usually find a price low during the month of May. Should prices rally, are you ready to have orders in place to be making cash sales with your grain elevator? Do you have an idea of where your cash sale price targets might be?
The May USDA WASDE report will incorporate fresh survey data from northern Midwestern states regarding their late 2019 harvested crop. What if on this report it is revealed that harvested acres were indeed less than what the current USDA estimate states? What if on that report yield is smaller than what the current USDA estimate states? What if there is a weather issue in May and we again struggle to get the crop planted this spring? Those factors would likely fuel the need to make a seasonal price rally occur!
3. Don’t stop running.
I know you’re exhausted. I hear it in your voices. I read it in your tweets. Just when you were getting over the emotional, mental, and physical exhaustion of 2019, 2020 just slapped you in the face.
Hear me now: this is your “Platteville hill climb.”
This is when you are about to find out just how tough you are. You’re gonna curse. You’re going to be angry. You might feel that you can’t go on, but believe me you will survive. Just put one foot in front of the other. Right now, that is all you can control.
Quite frankly, you need to remember that you are the best of the best in American Agriculture. And the best of the best don’t quit. They dig deeper, they keep moving, and they look ahead to better days.
Don’t give up. Keep looking for those opportunities. They will be there.
Reach Naomi Blohm: 800-334-9779 and firstname.lastname@example.org
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.