With harvest now underway, it’s important to have a grain marketing strategy, to ensure that you’re maximising your crop potential and return. As a commodity risk team, here are our top guidelines for establishing a marketing strategy this harvest.
Marketing guidelines assist in making rational decisions and that’s why it's important to have guidelines based on your business. Marketing guidelines are essential for making informed decisions. These guidelines should be tailored to fit your farm's unique needs and can include specific selling points that act as signals for when to sell or hold, considering factors like price levels, global market trends and crop development stages.
To ensure the strategy is effective for all business members, it’s important to understand your individual and risk profile. Find a sales strategy that is personalised and fits your risk appetite, as grain marketing shouldn’t be a stressful chore if you are selling when best suited for you. Examples could be chipping away with smaller parcels more often or selling larger parcels when pricing is ideal for you.
There are various tools we use to monitor sales and understanding your grain marketing products is important when assessing grain sales. Regularly updating your paddock and yield estimates helps you keep track of how much grain you might have available for sale. A position report does just that, it breaks down your commodities by area and estimated yields to give you tonnages available to sell. Once a production estimate is established, it can be overlayed with grain sales to determine a sales percentage or what yield is required to cover contracts. Using the calculations below will assist in determining your sales position.
- Sold percentage = (total tonnes sold ÷ total tonnes available for sale) × 100
- Tonnes per hectare needed to fulfil contracts = total tonnes sold ÷ area
Understanding when a good price is a good price will help navigate the volatile movements of grain markets. Using price deciles can help you determine if current prices are favourable, compared to historical averages. Also, knowing your cost of production helps set a baseline for what prices you need to be profitable. Use these insights to establish target prices for your crops, keeping your sales on track.
Finally, one of the most important guidelines of grain marketing is to be proactive with your contract management and due diligence. While it can be tedious to read through contracts and maintain an accurate income report, it is vital to be diligent when selling grain. Checking contract details, such as tonnage, price and payment terms, ensures that you receive correct and timely payments. Regularly reviewing contracts and addressing any discrepancies quickly can prevent costly issues for both growers and buyers.
Using the guidelines mentioned above will ensure that you stay focused on harvest activity without losing sight of your grain marketing strategy. In turn, you can feel in control of grain sales and achieve successful outcomes for harvest this season.
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1300 746 866
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