The Joplin Globe, Joplin, MO

Farm

December 10, 2006

Grain in the forecast

By Mike Surbrugg

msurbrugg@joplinglobe.com

LAMAR, Mo. - About the only certain thing when it comes to grain market strategies is uncertainty.

No two farmers are alike when it comes to risking what the farm produces.

A recent meeting at Lamar had a tongue-in-cheek title: "Buy Cheap-Sell High." What is cheap and what is high are something each farmer must decide.

Among speakers were Joe Pace, an agriculture teacher at Lamar and a farmer; David Whitson, University of Missouri Extension agriculture business specialist at Neosho, and Jesse Medlin, manager of the MFA grain elevator at Lamar.

Pace said the futures market can enable a producer to capture good prices two years ahead of when the crop will be planted. An example is the outlook for strong 2008 wheat prices. He suggested some farmers may want to "lock in" 25 percent to a third of the farm's 2008 expected wheat production.

Those involved in futures or other marketing strategies need to recognize opportunity and act to eliminate emotion or greed. "If you can lock in a profit you can live with, take action," he said.

Pace provided several printed pages of explanations of marketing terms and how they could be used.

Whitson said there are a lot of alternatives on how to market farm produce and farmers differ on which approach to take. But, farmers need to produce to have something to sell, he said.

Before any marketing plan can be set, each farmer needs to know his cost of production and then look at normal yield and prices to seek for a profit, he said. And, there is still room for dumb luck.

He cited an example of when soybeans were $12 a bushel in the early 1970s. A farmer in another state just did not get around to harvesting his soybeans for various reasons until February, when he brought his crop to the local elevator. That was the peak price for the year, Whitson said.

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