Marketing Grain During Volatile Market Swings
October 27, 2023
This year the wheat market continues to be a lot more volatile than it was a year ago. In fact, Columbia Grain’s Director of Customer Risk Management Phil Symons says it’s almost polar opposite. He explains a few things that farmers can do to manage their risk and profitability during these volatile marketing times.
"Last year we were making high after high after high, especially in the wheat market," said Symons. "We've been really focused more on the fundamental data, more supply and demand driven type numbers. We've actually been looking for more of the lower side of the markets as opposed to the highs, which is definitely almost like a polar opposite to what we have been seeing here in the last couple of years."
He says that's why risk management tools like Columbia Producer Solutions are so valuable to farmers.
"It's important to really look at a cost of production approach," said Symons. "This current year is going to be extremely important because the volatility in the market not only increases the daily price ranges that we see, but more importantly, it actually increases the emotion right behind pulling the trigger on your grain sales. And really with the tools that we're able to offer on our Columbia Producer solutions platform, we really do aim to help to reduce some of this emotion."
He says that Columbia Producer Solutions can help farmers utilize a cost of production approach to build a solid marketing plan.
"Especially when we look out to the 2024 crop," said Symons. "But once we have that cost of production known then we can start to layer in sales. Both above the market and below the market to help really place more of a safety net under the existing market to at least cover our cost of production and look at the desired rate of return that the grower is potentially looking for."
He has these planting tips for 2024 to help farmers get the biggest bang for their buck.
"Definitely getting your costs under control," said Symons. "Looking at what's going to give you the biggest rate of return. Overall, we're strong proponents for hard red winter wheat, especially in the majority of Montana. But take a look at all the different options that we have. From pulses to sunflowers to canola, whatever's going to give us the biggest rate of return, the biggest bang for our buck right now."
For more information about Columbia Producer Solutions, click here.
Source: Western Ag Network