Profitability is the Prize

Wednesday, April 24, 2013

The trade is always looking for some news, rumor or hype to trade and it can become distracting to those of us needing to sell physical grain.
As I always mention there are so many things that can distract us. Today we have at least three 24/7 news channels, investment channels and the internet. Let’s just talk about the internet for a moment. I Googled “Agriculture News” and in less than 2 tenths of a second found a mere 368 million hits. You are inundated with news about all sorts of things that ultimately affect your bottom line. May I remind you that the trade needs and is looking for this daily to continue our favorite word “volatility”.
     So what is someone to do then in order to get through all of the smoke? Focus on the prize for your operation…PROFITS. It all starts with a plan. A marketing plan each year should be completed and followed. There are times in a marketing year that a plan needs adjusted but it is a place to start. When working on this marketing plan the goal is to be profitable not to hit the high of the market. However, if you can hit the highs year over year, there is no need to read further. It is extremely important when marketing to know the breakeven and profit goals you have for your operation each year. This will provide you with sales goals allowing you to pull the trigger on sales needed to meet your overall operation goal.
     It is easy to say we can continue to go higher in our markets but the fact is, we have seen a two plus year bull market that will not last forever. We are starting to see world and domestic demand slip for our Corn. These are things to watch closely because just as fast as we found ourselves with 7 plus dollar corn we can see the CZ13 futures price down at the $4.50 level.
     When looking at making a sale ask yourself this, is it profitable and does it match up with my marketing plan? Utilize a marketing plan this upcoming year and if you have not yet made sales take a serious look at doing so. This is still a good profitable lever and good place to start making or continue to make sales for your 2013 crop year.