Did your New Year’s Resolutions address anything beyond losing weight, such as developing a marketing plan for either your old or new crop (hint, hint)?

Even though 1/24 of the year is gone, it is never too late to build a marketing plan. You may still have some old crop in storage, and you have some great opportunities for the new crop. Since you always have a crop to market, it is never too late to build a marketing plan. And they don’t have to be complicated, such as these.

Folks who regularly open the farm gate may remember a late summer suggestion about development of a marketing plan for the 2006 crop. It provided good start on marketing plans, for those who are new to the concept. If you didn’t get started at that time, wanting a different format, Melvin Brees at the University of Missouri offers his ideas, with the theory they can be simple and still effective. The Brees plans are one page marketing plans for pre-harvest and post harvest.

Brees make the point that detailed marketing plans covering several pages can be valuable, but one-page plans can be quickly reviewed when decisions must be made in short order in a volatile market. Both of the plans address price setting, quantity and timing, as well as market risks and addressing the need for flexibility. The post harvest plan includes a section for break-even prices that will help with making storage decisions.

Price. The price objectives and goals section allows a producer to create a range of upside marketing objectives and downside traps that will call for sales in the event of rapid market price deterioration. Both cash prices and futures prices can be worked into the plan.

Options. Producers using option strategies can record those, as well as producers using minimum price contracts that utilize options to establish that minimum price.

Risk/Opportunities and Strategy. Brees has created a section in the marketing plan to make marketing a disciplined activity, rather than an emotional event.

Flexibility. As you develop a marketing plan and create price objectives, you constant fear is being wrong. This section of the marketing plan creates opportunities, such as spreading sales throughout the year, or taking advantage of options to avoid missing higher marketing prices.

Regardless of the simplicity of a marketing plan, it needs to be periodically reviewed and updated if necessary. It creates your disciplined approach to marketing by setting some reasonable price objectives.

Summary:

Although marketing plans can be complex or simple, they need to contain reasonable price objectives and a disciplined approach to execution. Plans which contain those objectives, also need strategies to ensure commodities are not sold on emotion, but the flexibility to have a pre-determined “plan B” if necessary. A marketing plan needs to reflect the character of the producer, and be a plan the producer is comfortable in executing.

Stu Ellis