Agriculture

Marketing Plans Increase Success

Setting prices for your farm products can be challenging. Setting new numbers, reviewing previous numbers, knowing what your neighbours are doing, monitoring local, national and international markets...all are factors in setting your market prices. Your odds of success are greatly increased if you have a solid marketing plan.
 
You need to know what it costs you to produce your grain, produce or livestock so you can set a price that allows you to make a profit. Every single cost has to be used in the calculation (ex: storage and interest or late payment fees on bills).
 
Producers sometimes fail to plan properly and end up being forced to sell at lower prices. Others choose to let the bills wait, hoping they can get a little more for their products, even if it’s not enough to cover interest and late payment fees on the bills and there’s a risk of ruining your credit rating. 
 

Some options

Apply for programs that provide interest free cash advances to improve cash flow while holding onto your grain until you can sell for better prices.
  • Consider building extra bins, so you can store your crops until you can sell for better prices. The amount gained from storing your grain longer could potentially pay for that bin in a short amount of time. 
  • Sell incrementally through the year. While you may not hit all the price highs, you probably won’t hit all the lows either. Averaging your sales throughout the year could benefit as opposed to selling the entire crop all at once, or whenever bills are due.
  • Monitor local and world markets and try to lock in at the best prices. Buyers who fear shortfalls of grain may offer premiums that will often drive prices up. However, you need to make sure you assess your fields and their potential before committing to quantities or quality. Read the fine print: If your don’t do a fairly accurate assessment and you lock into a contract before harvest, you may have to pay penalties if your quality or quantity don’t meet the agreement. It’s important to have an act of God clause to reduce some of your risk.
  • Do your research. Find out how other farmers in your area market; take advantage of current workshops and courses on marketing; and talk to your local farm management specialist.