Farmers' Corner September Issue Index

The current price situation has given rise to many opinions about how to make the most of pricing opportunities. Sometimes it seems like there are almost as many ideas as there are people.

One thing is for sure -- this is not a good time to take on unnecessary risk, either by speculating on prices or spending more money than you have to.

Any alternative that keeps you in the market after harvest is going to cost more money, and with prices where they are, that may be money you can't afford to spend.

Here's a scenario that may be feasible for this situation. If you achieved higher than average yields this year, current prices may be better than you think. A higher yield will give you a higher return per acre, so even at low prices the results might be better than you expect. The situation could be even better if the LDP rate makes the cash bid better than the loan rate.

Take a careful look at your costs of production, yields, and the current available selling prices. It may be that turning your grain into money now may be the best option for you. You'll have positive cash flow at harvest and avoid the risk of any further loss through additional spending or negative price movement.

If you are committed to staying in the market, do it in a way that will limit costs and avoid any risk of lower prices. Take the LDP, sell your grain, and buy Minimum Price.

You will receive a check for our current cash price, plus an LDP payment from the government. Purchasing Minimum Price will give you the opportunity to receive any increase in the price of a specific futures month. Your other alternative is to put grain under the loan, but the up-front costs are higher.

What you don't want to do is take the LDP and not sell. This will only add more risk to your marketing and stress to your life. Take the risk away by selling and taking the LDP; whether or not you decide to buy Minimum Price is up to you. Then, you can focus your attention on marketing next year's crop. Extend your '99 marketing period without price protection and you extend your worry and stress about this crop. At least protect yourself against lower prices so you can get rid of the worry and focus on more positive things like selling 2000 crops at a profit.

Don't let yourself get so bogged down with this year that you're too preoccupied to prepare for next year and beyond.

Will Opportunity Knock?
(And will you be there to answer?)

The only thing we can say for sure about prices for 2000 and beyond right now is that they are better than the current '99 prices. As always, prices will fluctuate as time goes on, and it's anybody's guess where they'll end up. What is really important is, what price will give you the profit level you're looking for?

Do you know what any given price means in terms of profit per acre? If you do, will you be ready to lock that price in if and when it is available for next year or even the next two years? If you enter Target Contracts early, more often than not you'll find that your price is available sooner or later. Get your 2000 Target Contracts in soon; don't find yourself away from the door when opportunity knocks.

Eliminate An Extra Job . . .
. . . We Can Help

If you could eliminate one job (and the extra stress and distraction that goes along with it), would you? You can, and we can help. We can save you the time it takes to check prices 4 or 5 times each day. Does constant price checking really change the level at which you would be willing to sell? Does it help you get a better price? Are you happier continually watching the market?

You have plenty of jobs to juggle every day as it is. Besides, the market is going to do whatever it will do whether you keep an eye on it or not. Deciding on a price level and setting a goal has saved many farmers much frustration. Decide where you're willing to sell, then enter a Target Contract and let it watch the market for you.

Get It Out Of Town

Imagine two towns. Town A is full of unsold grain -- grain is busting every bin, filling the streets, and spilling out of every pickup, flowerpot, and bathtub. Town B is empty -- all its grain has been sold, used up, and shipped out. Where will the price be higher? It may be that selling grain and getting it out of town does more for prices than holding on to it. Getting rid of grain on hand might help you get closer to next year's target price.

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