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Corn+Soybean Digest

No-Brainer Marketing

The success of any marketing plan is no better than the time you devote to it, says Parman Green, University of Missouri farm business management specialist.

Unfortunately, many farmers don't have, or don't allot, the time it takes to make their marketing plans work.

"Too many farmers get into a strategy that's too difficult for them, and they don't have the time to make it work," Green says. "The best thing they can do is step back and ask what's the greatest return they can get for the time they can spend."

The worst plan, of course, is no plan at all.

"When you don't have a marketing strategy you tend to watch the high months go by because you're waiting for prices to go even higher," says Green. "If you wait for price, rather than plan for it, you put yourself in a greed, fear or panic mode of marketing."

So Green turned to historical price data to try and develop a "no-brainer" marketing strategy for farmers. After analyzing 28 years of price data provided by the Missouri Department of Agriculture, he found two price trends that farmers could use to help market soybeans.

"After adjusting prices for holding costs, I looked for what months a farmer should sell soybeans if his goal is simply to hit the year's highest prices," Green says.

The Missouri data show that if you sold soybeans in October, November, May and July you'd have hit the yearly high 66% of the time. During the 28 years of data, the yearly high occurred in October seven years, in November five years, in July four years and in May three years. On a percentage basis, the data suggest you sell 37% of your crop in October, 26% in November, 16% in May and 21% in July.

Shooting for the annual highs, however, won't necessarily give you the best average net selling price, Green points out.

"What I'm really interested in is how much money I can put into my pocket. So I subjectively picked a minimum market price of $6.55 and looked at the average data for the last three years to see what months would provide that price level or higher."

The data show that, if farmers had sold each month for the eight months from November through June, they would have received the highest monthly net price for their soybeans.

When Green analyzed corn data, looking for similar trends, he didn't find them.

"On average, the data indicate August and September are not favorable months for selling corn," he says. "Other than that, the average net monthly prices are much less volatile than for soybeans."

Green's strategies still leave farmers with the decision of when to pull the price trigger within the month they decide to sell.

"You need to talk with your elevator or grain company for advice on the best selling times within the month," he says.

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