As human beings, we can become accustomed to doing things a certain way. We make the same decisions and repeat the same patterns every day, but are they serving us to their greatest potential? What about in terms of your grain marketing plan?
You may be accustomed to selling your grain a certain way and it may have served you well in the past. But does that make it the most optimal way for you to generate profits now and in the future?
As you build out your grain marketing plan with the help of an experienced advisor, there are several pitfalls to try and avoid on the way to creating sustainable financial growth.
Here are five key mistakes to avoid.
Mistake #1: Selling your grain without identifying your financial goals
You should always start with a visionary, high-level question such as “what are my financial goals?” Goals provide a purpose and a strategy for success, and without them, you might not have a clear idea of what success looks like for you (beyond short-term financial gain). You could be missing out on opportunities to help you obtain long-term financial growth without realizing it.
Not sure of what your goals should look like? A FarmLink advisor can help uncover some opportunities and identify areas you may not have previously considered.
Some strategic and attainable goals may include:
- Retirement and succession planning
- Purchasing new equipment
- Decreasing farm debt
Setting clear goals and expectations is the best starting point for selling your grain and the best way to avoid missing out on profit.
Mistake #2: Creating a strategy and selling your grain without a proper team in place
While you may have always operated on your own, you don’t have to be alone in your grain marketing efforts. Focus on your strengths and the things you enjoy most, and then put together a strong grain marketing advisory team to help fill in the gaps. First and foremost, your grain marketing needs an expert, unbiased second opinion.
As you consider your team, some questions to ask yourself include:
- Are you executing sales without a process?
- What do you consistently do before saying yes to a deal?
- Do you fully understand all the terms and conditions of your grain contracts?
An excellent advisory team typically includes:
- An agronomist
- A financial advisor
- A grain marketing advisor
Producers with a customized grain marketing plan remain in control, even when the unexpected happens. FarmLink empowers producers to make smart grain marketing decisions to grow their businesses and make more money sustainably.
Mistake #3: Marketing and selling your grain based solely on price
Sometimes producers can become anchored to a specific price. 2021 was a great example of excellent prices being presented to producers, and it’s instinctively challenging to say no to selling at a great price.
Selling decisions, however, should be made based on strategy and market analysis, as prices can vary wildly throughout the year.
The grain marketing space is extremely noisy. All that data and market information needs to be distilled down to help you decide whether to sell or wait. A grain marketing advisor can help you make sense of all of that information, while connecting the dots and creating a clearer picture of your options.
Some questions to ask yourself as a producer if find yourself only considering price include:
- If I make a sale today, does the price align with my strategy? Am I selling based on impulse?
- More importantly, how much runway is left?
- Does the price align with my financial goals?
Mistake #4: Marketing based on persuasion and emotion
If you have a concrete grain marketing plan in place, then it can be much harder for grain buyers to persuade you to sell based on fear tactics or the allure of high prices. Guilt may even play a factor, since you don’t want to burn any bridges with valuable contacts.
While emotion may play a role in how you run your farm business (it is yours after all), making a grain marketing decision based on emotions can be a dangerous strategy.
This is known as reactive selling – selling grain based on a perceived opportunity, gut feeling, or emotion. Not only can this be a mistake; it can also cause plenty of unnecessary stress and anxiety!
We encourage all the producers to sell with a proactive mindset instead of a reactive one. Having a plan takes all the emotion out of grain marketing, which means less stress for you in the long run.
A proactive mindset involves communicating with a buyer about your product and expectations and saying “yes” when the market aligns with your decision-making criteria. You know your expectations because they are planned out ahead of time with an advisor.
Mistake #5: Being too hard on yourself
Everyone makes mistakes, especially in areas as dynamic and unpredictable as grain marketing. Your best bet to help avoid mistakes is to build a decision-making team, apply a process, and move forward.
Protect your enterprise without getting bogged down in doubt – don’t cloud your judgment with online forums, engaging in negative conversations, or looking at an analysis that is not part of your process.
Grain marketing isn’t a short-term, “get rich quick” scheme. Not only can a grain marketing advisor help point out some of the mistakes we’ve, but they can help you develop a long-lasting strategy to reach your goals.
To achieve long-term sustainability, you must continually review and change your strategy. Examine where you could have done better or your most vital selling points and formulate tactics to close gaps and maximize future opportunities.
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