Marketing can be one of the most challenging jobs on the farm, and one of the most rewarding.
Brian Voth, President of IntelliFARM Inc. says when it comes to marketing knowing your numbers is key. Voth was one of the speakers at the Thanks for Farming Tour stop in Swift Current, Saskatchewan July 12th and 13th.
"It's important to know your numbers, know your cost of production, make a plan and stick with that plan. Rather than just shooting from the hip, not knowing where you actually stand, not knowing if you're making profitable decisions or not."
He says its a strategy that can be used every year, regardless of what the marketing conditions are.
"It really helps to remove as best as possible some of the emotion and anxiety over grain pricing. And wondering, am I making the right decision? If you're making a decision based on profitability, it can't be the wrong decision at the end of the day."
Voth recommends taking those emotions out and making number based decisions, so you can be prepared for what's coming.
"It's not always going to be $20 canola and huge profits. We could very well end up into a year where margins are negative again. That's just the nature of farming. And that's what we want to capitalize on, the good years because we know that there's bad years that we're going to have to ride out."
He notes when making that plan be sure to look at incremental sales because nobody knows where the high point is going to be.
" If you sell in (10-15 per cent) increments and the markets going up, you're going to average your price up. Similarly, if you sell in increments on the way down, your price is going to average down, but you will have also captured some of the higher value you're not just going to price it all on the downside and that's it."
He says making that plan and setting that target sell price along the way has to start with doing a budget so you actually know where this target (price) needs to be.
Voth suggests looking at your cash costs that you need to cover on any given year. If the grain prices happen to be below that, there's no reason that you would ever want to sell the grain because you know it's going backwards.
"You're better off getting a line of credit, getting an operating line, whatever, to carry yourself through. Because inevitably grain prices are not going to stay at that value either. Unless if the the flipside to this is, if there's some major inefficiencies on your farm and that's why your costs are so high."
He says its not a poor year that does a farm in, it is the decisions that get made or mismanagement that has trailing effects. That is what gets farms into trouble when we go back to a more normal marketing environment.
The Thanks for Farming Tour's next stop is in Winkler, Manitoba July 27th and 28th.