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.
Georgia voters should be asking why Governor Kemp and all concerned under the Gold Dome are ignoring a proven successful process to create a new revenue stream estimated to add about $100 million to Georgia coffers annually. It’s a refundable fee on money wired out of the state that has been working in Oklahoma for more than a decade and will not cost state tax-filers a penny.
I get the sense that a common response to a near-record late summer and fall price rally is, “I sold too early!” That’s a great example of looking back at old decisions. I choose to look forward and note that 2021 pricing opportunities should be on your radar.
I want to introduce you to the simplest of all preharvest marketing plans. This is an approach used by my celebrity producer, Aunt Tilly. Her approach has proved to be remarkably effective over time. Tilly prices 80% of her anticipated new-crop corn and soybeans in 20% monthly increments, starting in March and ending in June. Her preharvest activities are consistent with her 80% level of crop insurance coverage. She prices the remaining 20% of her production at harvest.