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How to write a pre-harvest marketing plan

Edward Usset

Summary

Five Steps to a Pre-Harvest Marketing Plan for Grain
Three years into a bear market has created a renewed interest in grain marketing plans. In this session, we will discuss five steps to take toward creating a marketing plan.
Step 1 is start with a clear objective.
Step 2 is to establish a minimum price objective, based on production costs. In my opinion, this is the most important part of the plan. Set too low and you are busy pricing at unprofitable levels. Too high and you do nothing.
Step 3 is to establish a maximum price objective. Teaming your max target with your minimum allows you to “bookend” all other price objectives in the plan.
Step 4 is to establish decision dates. Decision dates work in tandem with your price objectives. If you reach a decision date before a price objective is reached but the price is above your minimum, price the grain.
Step 5 is to select your pricing tool. The choice of a forward contract, sale of futures or use of options is a tactical decision that depends on your opinion of basis and current market factors.
After working through each step, participants should feel confident about their ability to write their own marketing plan.

Details

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