Mastering Grain Marketing Transition for a Successful Farm Future

Part 1: 5 Steps to Transition the Grain Sales Process

Earlier this year, when the grain markets faced a downturn, many farmers found themselves in a panic. One Missouri customer called, expressing his stress over missed grain sales opportunities. Transitioning grain marketing to the next generation isn't easy, but it's essential. A basic marketing plan needs to be in place, detailing who makes the calls, how much to sell, to whom, and the decision-making process. It also requires a clear timeline for the transfer of responsibilities.

Stage one is about preparing to share. Write down your marketing plan and communicate it to the next generation. A marketing plan turns your crops into money. Use the provided templates to track and update your numbers regularly. Stage two is about time to share. Assemble the future farm operation members, assign tasks like checking prices and updating calculations, and establish a weekly meeting routine. Remember, you grow money, and these meetings are crucial.

Part 2: Track Your Inventory

Transitioning from one generation to the next is challenging, but tracking inventory is a key step. As I mentioned in March, this is a long-term project. Have someone on your farm track cash crop and new crop values weekly using the provided templates. Add another layer by tracking the value of inventory in the bin, whether on- or off-farm.

Keep going with this process. It helps you realize the importance of marketing and the significant dollar amount changes month-to-month.

Part 3: Transitioning Farm Marketing Decisions

Many farmers have found my series on transitioning decision-making helpful. Think of price and time targets like an archery target. Set them in advance when the markets are calm to manage risk. Price targets are above your breakeven, and time targets are a backup plan. Assign target duty to the next generation to learn and master this life skill.

For example, using March 2025 corn and soybean futures, set price targets like $4.65, $4.77, and $4.89 for corn, and $11.55, $11.85, and $12.15 for soybeans. Set time targets for Thanksgiving week and specific weeks in January.

Part 4: Farmers Talk Grain Marketing Transition

In response to my series, farmers have shared their experiences. One young farmer cut out an article and started communicating with his dad about decision-making. He faced challenges but learned from them. Another young farmer took over 30% of the sales with a detailed budget and made some profitable sales but missed opportunities later.

Giving up control is hard, but it's necessary for a successful farm transition. Aim for a gradual, percentage-based transition. In one case, a young farmer initially faced doubts but later saw progress as his dad started to trust him more.

Current grain markets have seen lows and rallies. As a seasonal trader, I expect higher prices in March to early June and lower prices in August through October. Avoid sales in late February and August and be ready to sell during planting time.

Remember, the risk of loss in trading futures and options is substantial. Past performance is not indicative of future results. Seek professional advice and make informed decisions.