Last month I introduced you to Aunt Tilly and her simple approach to pre-harvest marketing. Tilly prices 80% of her anticipated new crop corn and soybeans in 20% increments (March, April, May and June), with the remaining 20% priced at harvest. Despite a disastrous 2020, Tilly’s approach has proved effective over time.
Simple is good, but I remain uneasy with one aspect of Tilly’s approach: her willingness to take action regardless of the price level. That meant she was active last spring, when a pandemic-induced crash had Nov’20 soybean futures as low as $8.50/bu. and Dec’20 corn futures below $3.50/bu.
Ouch.
I am a proponent of spring and early summer sales, but I think every producer needs a minimum price objective that is consistent with production costs.