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Southwest Illinois | I definitely agree with you. I feel like hedging puts me in a better position to make better cash sales or defending sales that were already made. My accountant always tells me he can guess my cash sales by the gain or loss in my hedge account. Typically if we make money in the hedge account our cash sales were below average, if we lose money in it we generally made good cash sales. I think in general most farmers are pretty good when purchasing equipment, seed, and other inputs but many use a needs based marketing plan. Meaning they sell grain when they need money. I watched my dad build bin after bin because he always had grain carryover. If he needed money he sold grain. It was a terrible plan in terms of profit. He was great at cutting costs but terrible when generating revenue. Marketing services provide very good historical information, the key is you need to know your COP, understand the trends in the market, understand the traders positions and understand your own cash flow needs(including how crop insurance impacts you revenue). Once you have that in place, you will become a better marketer. I am far from perfect and we don't try to hit home runs, we try and string a bunch of base hits together in hopes we score a lot of runs. | |
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