Here is the million dollar question: when should you sell your grain?
Get it just right and you are a genius and the envy of your friends and neighbours.
Get it wrong and you beat yourself up with coulda, shoulda ,woulda: if only you would have known that this or that was going to happen.
The chances of selling your grain at the peak price in any given year are not good. However, many producers chase the top every year, sometimes with success and sometimes without.
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I have been asked this question many times as an agriculture business adviser. In the early years of my career, I would usually shrug it off and explain that I was not a marketing coach nor a psychic.
However, now I have found a response that gets producers thinking. I answer the question with another: what is your cost per bushel? Some producers can answer this with a high degree of confidence, but most do not know the answer.
Many farmers believe that $10 per bu. is a bad price for canola because the price was $15 per bu. two years ago. That is true, but what if you knew for sure your cost of production was $7.90 per bu.? Would that change your opinion?
Knowing your operation’s cost of production can make a huge difference in helping you decide when to sell your grain. It eliminates much of the anxiety of wondering where the top will be and if you should sell today or hold on.
Knowing your costs helps you know what prices result in a profit.
That’s all most producers expect: that their hard work from the past year results in a profit.
Knowing your cost of production is an important piece of the marketing puzzle. You should also spend a lot of time reading and following the markets.
Today’s world of grain farming requires you to stay on top of the markets and pay attention to what is happening on a daily basis.
If that is not for you, then I recommend speaking to a marketing coach to get some help because things change so fast in the global trading environment.
And what’s the first question a marketing coach will ask you? Yes, it will be, what is your cost of production?
A good business adviser can determine and update this at several stages —crop planning, mid-year and after harvest — to provide you with the necessary information to make marketing decisions.
