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Central IA | I'll respond as your in same position as me. Work primary off farm. Have 2nd business, farm. Also, it is not a hobby, may be stress relief at times. But a hobby is not tax deductible.(from my tax guy).
You know cost of production, your insurance bushels, and you average production. I take notes from last year and look at notes from last 3 years. Those are price notes and reasons why I sold or didn't. Make a plan after last harvest, look at notes and plan throughout marketing year to take emotion out. Try to take "cookies" in certain time frame and don't try and hit homers.
Now, what I do. I don't have bins so its simple. I take my insurance bushels and try and sell ~80% of that before July 4th. Normally 5 sales.
Example beans last year. I sold 20% in February, cash price for fall delivery. I made 3 more sales, because of rounding it was ~75% of insurance number. Then the bottom fell out. All sales were cash fall delivery. I thought of HTA(sell board price and basis later) but with COOP, unless bad crop spring basis is okay. Those were good sales, the rest. Well, I feel the worst is store and hope. So I sold with a slight bump in November and learned. Storing with a plan good, storing and hoping is bad. IMO.
This year, I sold about 30% of corn yesterday. Took some risk off, price is okay and keeps me running another year. I will sell another 20% most likely in March-April if over 4.11 on board. Or up to my pre-harvest sales limit if over 4.21. I'm open for business next year and make some extra principle payments at those prices.
I would like a bin(actually a corn bin(16-22K/bu) and a bean hopper(3-5K/bu)), sale about 50% average production, then sale in January cold when ethanol plant needs or June/July so bin is empty for harvest. But one step at a time. Remember with bins, cost, tax, energy and upkeep. Yes I think bins pay, but not with store and hope. | |
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