Were you ready to put the pin in?
Do you occasionally have the luxury to have someone assist you hooking up an implement to a pickup if the ground is a bit slippery? The little more back you ask for turns into 6 inches. The “now go ahead” request nets you back to the previous spot, then may not be able to move again. Putting this in the marketing perspective, you sometimes aren’t fortunate enough for the market to get up to your target price. And if it does you may have a short period to act before the market moves again. Hence the comparison of being able to “put the pin” in. This happened July 1st in the corn and soybean market. The last time prices were at this level was last December. Since then we’ve had good planting conditions in general, then much needed rainfall came. These two good production factors led to a steady decline in prices. The June 30th USDA report was bullish from a combination of stocks usage, yield estimates, and a slight adjustment in planted acres. This is why I so often stress to choose specific quantities at certain price levels, set an order with your merchandiser and go about your business. Let the pin drop in by itself to make the sale.
As one half of 2015 is behind us. This is an important time to quantify inventories for needed purchases, debt payments and sales to keep your operating loans in check. As you sort through the crop and livestock inputs you’ve purchased so far, assess the validity of each. Is this something we could get by without? Did it provide an appropriate return? Low cost production often outperforms highest yield in enterprise profitability.
For help with recordkeeping, enterprise analysis, and other Farm/Ranch Business Management topics, you may contact us at 1-800-684-1969 or www.sdcfrm.com.