You’ve likely heard the saying “Failing to plan is planning to fail.” If this applies anywhere, it applies to grain marketing.

Noah Radde, grain origination specialist at ADM’s Beech Grove, Ind., facility, and Scott Ashwill, an ADM grain origination specialist in Indiana, answer questions that lay out a path to a solid marketing plan. It’s good advice whether you’re a novice or a savvy grain marketer.

If you’ve still got 2020 crop to sell, when should you start selling?

Radde: Before I could offer guidance, I would need to know a couple of things. Don’t worry about nearby expected market trends for a moment. First, tell me about your ability to take risk. What is your risk tolerance? That is the first question you should ask yourself. Then you can start to build a marketing plan with support from someone like myself or Scott.

Ashwill: Figure out what price you need to be profitable. What is your cost of production for both corn and soybeans? That is where I think you need to start. If you don’t know your cost of production, then it’s tougher to figure out what price you need to be profitable.

How can you figure out cost of production?

Ashwill: Some guys are comfortable with their cost of production and breakeven numbers, while others aren’t quite there yet. You can get close if you use Purdue University cost-of-production budgets. You can get similar information from the University of Illinois. Ag economists update those regularly, and they can at least get you in the ballpark.

Radde: There are tools you can use to track cost of production. GrainBridge is a grain marketing platform which allows you to put in cost of production and market prices, and track how it affects profitability. Check it out at grainbridge.com.

Why does it help to assess risk tolerance and know cost of production?

Ashwill: Once you know those things, you can begin to set targets on grain pricing. As you put a plan together, you also know when you need cash during the year to meet various cash-flow obligations. You can tie those things together and build a plan that allows you to sell your crop over time.

What tools can growers use to market grain once they has a plan?

Radde: Forward contracting is common, but there are many other tools. One you don’t hear as much about is a daily averaging contract. Pick a time of the year when you think prices will be more favorable and dedicate a certain number of bushels to be sold.

Here’s a simplified example: Suppose you commit to selling 1,000 bushels over 100 days. You pick the period. Then based on the contract, a program automatically sells a set amount every day. In this case, it would be 10 bushels per day. You wind up selling at the average price during that period.

Where can I get more information to help me improve my marketing skills?

Ashwill: There are many good resources at universities. ADM has a website that can be very helpful. It can also help you find useful podcasts on marketing tips. Visit admadvantage.com. It has a link to an ADM podcast series, “In the Driver’s Seat.”