West of Lincoln a little bit | I think there's a reason I keep hearing that 2/3 of the crop is sold in the bottom 1/3 of the market. When it's climbing, farmers don't sell much thinking it will keep climbing. When it turns around and falls, they have trouble selling because they think it will go back up again. It's not until it's fallen so far that panic and fear sets in when sales are made toward the bottom.
Every price can be sold twice, on the way up and on the way down. The perspective about that same price is different depending on the market direction.
In the end we have to look at our own spreadsheets and determine what prices we need and what we absolutely couldn't tolerate. A young farmer in expansion mode with a higher debt load will need to lock in profits and take more risk off the table. A farmer heading toward retirement with everything paid off is perhaps willing to risk more in the hopes of one last hurrah in the markets. Locking the bin doors shut doesn't work everyone.
I'm looking at 2014 with a new set of eyes. IF we get a huge crop this year the markets will tank. Can I afford to have 2014 corn priced $1 lower than today? yes, but it hurts some plans that are already in motion. With fertilizer locked in and seed unlikely to get cheaper, and fuel unlikely to be massively cheaper, there are many relatively fixed expenses that won't drop timely enough. Protecting some of that seems prudent, FOR US. Not for everyone. In a nutshell, I'm selling just a little on the way down. Not much, but enough to protect what I've already committed to. |
good marketing
