A recent session at the GRDC advisers update raised some interesting views . I was suggested that most farmers spend more time looking how to sell their crop than focussing on when to sell .
Suggested steps to developing a marketing plan include
- Calculate the gross margin of the crop i.e. your breakeven price , which becomes your initial target
- Create a cash flow budget the will tell you when receipts from sales are required
- Determine when to sell in relation to the production cycle , pre planting , post planting , pre harvest , at harvest , post harvest
- Determine how much to be sold /priced at these periods
- Determine how to sell/price any sales before harvest ; swaps, options or forward physical sales
- Determine what price to be targeted
- Determine how much will be carried over to the next crop and how long this will be held for
It was also suggested that farmers should consider forward selling 2014 now as well.