Growers should be flexible

February 14, 2018

Flexibility is key when markets are volatile and this includes having a marketing plan in place.

 

“We’re going to get into more volatile situations and we’re going to have to be able to manage that,” said Kent Stutzman of Advance Trading in Bloomington.

 

Stutzman, who was among the speakers at last weekend’s panel discussion at Flanagan-Cornell High School, notes we had two weeks in the last three years to sell something at a high.

 

“We’ve had three record crops in the last four years. That’s the reason we are in the situation we are in.”

 

Stutzman likes to see farmers base their marketing plans on risk management, not price prediction. Options which could help growers include puts which lock in a price floor and can insulate you from a price drop or calls which gain in value if the futures prices rally. This allows someone to make a cash sale with confidence.

 

The fact that two-thirds of Illinois is in stage 1 drought is something that could eventually impact prices, in Stutzman’s opinion. We are going to need more rain to get the crops off to a good start in 2018 and some are wondering if we will get enough this year.

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