Grain broker and grain marketing advisor are both crucial roles in the grain trade. Although both are focused on the best outcome for their clients, there are key points that differentiate the two.
A grain marketing advisor develops a solid, long-term grain marketing strategy for a producer looking to sell their grain.
A grain broker’s role is more focused on the outcome than the journey. They get the best deal for both buyer and seller.
The advisor’s focus is the process. The broker’s focus is the deal itself.
But that’s just at first glance. Let’s take a more in-depth look at the two roles.
Strengths of a Grain Marketing Advisor
To understand how a grain marketing advisor can help you and your farm business, it’s best to learn more about what they’re good at.
Experts in their field
Grain marketing advisors are trained specialists that help you capitalize on the ever-changing market. They’ve developed a thorough understanding of the complex metrics, data, and markets in order to help you develop a winning strategy to sell your grain for more.
Extrapolating complex data
A grain marketing advisor’s experienced approach provides you with key, actionable insights — not an overload of noisy data. They cut the fluff out of the picture and provide you with a clear step forward, instead of just burying you in a pile of numbers and charts.
Unbiased information and services
It’s crucial while searching for ways to prepare and improve your business for the long haul that you find resources that work with you, not against you. This means finding unbiased and unvested opinions on market data.
A grain marketing advisor provides exactly that. Unlike a grain elevator, advisors are not connected to anyone who can profit off your decision, except you. Your success and happiness motivate them to bring you the best advice possible.
Custom advice, tailored to your farm’s specific needs
A variety of factors affect grain marketing performance. Your grain marketing advisor should help you decipher them so you can focus on what you do best: farming.
Grain marketing success, on the other hand, starts with a comprehensive plan for your operation, and the more detailed the plan is, the more you’ll be able to focus on the benefits.
Help you create a sustainable long-term strategy
When you’re out in the field, it’s easy to put grain marketing on the back burner, but an expert grain marketing advisor, just like a state-of-the-art seeder, is an essential part of a producer’s toolkit for maximizing your return year after year.
Strengths of a Grain Broker
A grain broker is really involved in the end transaction, and they work toward the best end for all parties involved. Here’s what a broker is good at:
A broker maintains records of business transactions and product inventories, reporting data to companies or government agencies as necessary.
Brokers arrange for transportation or storage of purchased products.
Brokers review orders to determine product types and quantities required to meet demand. This helps facilitate the best deals for the right crops.
It is the broker’s responsibility to work toward the best deal for all parties involved. They responsibly negotiate on behalf of the buyer and the seller to ensure everyone’s happy.
The broker directs workers that are engaged in cutting, transporting, storing, or milling products and maintaining records.
How Brokers and Advisors Help Your Farm Business
You know what brokers and advisors excel in, respectively, but how does that translate to putting more money in your pocket?
The role of a broker
A broker is a matchmaker who facilitates a transaction between a buyer and a seller in exchange for a commission. A commission is usually paid by the seller; however, certain brokers may charge a fee to both the seller and the buyer.
Brokers do not assume legal or physical control of the crop being brokered; instead, they arrange for the transaction to occur once both parties have agreed on the conditions of the sale. The broker may arrange for trucking, or the buyer or seller may be able to manage that element themselves.
Cash grain brokers often deal with buyers who are not licensed. Under current rules, end users of grain need not be licensed with the Canadian Grain Commission. Crop producer protection has been under review in recent years and is subject to change.
The over-arching goal that a broker has in front of them is to make sure every party involved in the sale is happy. That means they work for your approval. Similar to an advisor, their success depends on yours.
The role of an advisor
Hiring a grain marketing advisor helps you develop a plan that sets you up for long-term success, helping to limit risk in the future. The work of an advisor is to help you make the smartest grain marketing decisions in terms of your goals and sell your crop at the right time to the right buyer.
Producers hire advisors and consultants for a variety of services, such as agronomic and animal nutrition advice, as well as tax and legal advice. However, not as many producers know about the advantages of working with a grain marketing advisor to help them turn their crop into profit. It’s important to be backed by a team of advisors to support you with all aspects of your business.
There is no such thing as a one-size-fits-all grain marketing advisor. Consider your goals when hiring a grain marketing advisor before starting your quest. Make sure your goals are achievable and align with what the advisor can offer.
Creating your Long-term Grain Marketing Plan
1. Crop Production Plan
Develop a crop production plan that is well-suited to your rotation and maximizes potential.
2. Market Analysis
Gather unbiased market information from credible sources to make good grain marketing decisions. Monitor market conditions to make a sale when pricing is strong.
3. Financial Position
Gain understanding of where you stand in the ever-changing market.
4. Marketing Strategy
Understand your risk tolerance and reduce it by managing bin storage and contracts.
5. Actions and Timelines
Identify your target price, the tools you use, triggers in the market, and your responsibility to implement your plan.
Continuously review your strategy regularly and compare to past years.
To gain a better understanding of your farm’s potential and to lay it all out in an easy-to-digest format, sign up for your free GrainFox trial today. Calculate expenses and returns, get valuable market analysis, and get in touch with advisors who can help you maximize your grain marketing plan.