The market doesn’t care about your feelings. It’s a hard truth but a good one to remember when hesitating on pricing some crop or booking inputs.
Why? Well, as Brian Voth of IntelliFarm explains, farmers can be comfortable paying higher prices for fertilizer to ensure they have it on-farm, but hesitate to lock in a portion of production to offset that cost because the price per bushel isn’t what they want it to be, even if it’s profitable.
“The numbers are the numbers,” Voth says, and when it comes to penciling out cost of production for the year ahead, hard numbers compared against averages and profit margins matter more than what farmers are perhaps hoping for, based on the last 24-months of unprecedented figures.
For example, current pricing opportunities for many crops are profitable for most, but the actual price per bushel or tonne seems “low” compared to recent memory — and that has some hesitating to make decisions on pricing. The thing to remember, Voth says, is that current pricing opportunities are historically quite good; don’t make the mistake of waiting on sky-high numbers of recent memory.
Plus, he says, many of the crops in the western Canadian playbook pencil out in the black, even at these “lower” prices. That hasn’t always been the case, and while input prices are perhaps a little slower to pullback, using marketing strategies to lock in some profit is a good way to balance some of that risk.
Listen to the full discussion on costs, inputs, pricing, and a chat on wheat, canola, and oat prices:
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