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Frytown, Iowa | Thanks,
I would look at hedges as spec trades. I posted this because sometimes (lately) I find myself trying to play a marketeer in order to justify farming. My farm income should make its own way. Even marketing my bu outside of harvest is kind of a spec trade. Only difference is my first "buy" position is my inputs and that has a history of being lower than the market at the time of forward contracting. That lower cost gives me confidence to make the forward sale when really it's a spec trade that price will be lower at harvest.
Trying to figure out how to make more with less and not think I have to rent the neighborhood to do it. The high competitive cash rent game could easily put you a few cents difference on on the board plus added risk of weather/disease.
If we really need to become such good marketers to turn a profit going forward why not take a few more positions on the board and "increase your rented ground" by a shorting a good sale you know to be profitable and now down here where you know it's uncomfortable to sell in real life... Buy the short position back.
Il family farms and stamp farms (from what I remember) used one or two different companies such as elevators or semis/machinery operating at near break evens in order to pad the profits of their rental income. In the end it broke them. Are we doing the same? Identifying what really is the money maker each year may give you confidence to expand on that part of the business.
In the past the farm income has been nice but each year has marketing becoming a bigger factor. Is that something I should be focusing more on rather than attempting to rent 1000 acres at break even farm incomes? Would you have the confidence to market 1000 acres without actually farming them?
Something I've been thinking about. I put my thoughts out to be critiqued. Someone will look at this from a different perspective. I want to hear that perspective. | |
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Income: Farming vs marketing grain vs spec trades
