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Focusing on the Big Picture

Matt Roberts
Educational Opportunities: 
Grain, Young, Beginning Farmers
Home > Education & Events > January 2019 > Focusing on the Big Picture

When I talk to farmers about marketing, one of the things I always emphasize, is strategy versus tactic. Strategy is the big picture. Tactic is the little picture.

                Farmers tend to focus too much on tactics, on the day-to-day swings in prices. In fact, I think one of the worst things that's ever happened in grain marketing performance for farmers is auto-steer and smartphones. It allows farmers to fixate on moment-by-moment price swings when what they should be fixating on is the big picture; on creating a plan and sticking to it.

                One of the most important pieces of that plan is taking potential risk into account. When you create a grain marketing plan, one of the first things you need to think about is how much risk you can afford. Farmers with weak balance sheets, a including a young or beginning farmer, or farmers that have had a bad couple of years, simply can't afford the risk that strong-balance sheet farmers can.

                If you've ever seen the movie 'Moneyball', you know that they talk about how in baseball, the value of singles and doubles is way more important than home runs. That's true in crop marketing, as well. That’s where you should focus. You have to start your marketing plan with: What's your cost of production? What's a profitable sale? And then, create a written plan that holds you to making those profitable sales. Why? It's about accumulating singles and doubles over years. This will allow you to strengthen your balance sheet, so as you go through time you can then take on more risk and try to get more of those triples and home runs.

                Too many young farmers look around, and see established farmers, and they want to catch up with them. However, they don't realize the only way you catch up is by staying in the game. Those established farmers, they can afford to strike out. Young farmers, weak-balance sheet farmers, have to focus on opportunities with high probability, take profits when they're there, because they can't afford marketing failures like more established farmers can.
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