A shortage of pricing opportunities and a healthy supply of grain leaves farmers with one more pre-harvest marketing challenge: Where are you going to put that grain?
Making sure your grain has a home is a priority going into the 2025 harvest, a year when “no room in the bin” will be a common response to those without reservations.
"We're coming into a challenging time as we're looking at harvest and looking at not having enough storage for all of our crop,” Ed Usset notes in today’s interview on Ag Marketing IQ In Depth. Ussett, a grain marketing economist at the University of Minnesota, offered tips and hope for farmers mining their marketing strategy for profit and cash flow opportunities.
First, he said: "If you have a big crop coming and you don't have room for it on your farm—and a lot of people won't—make sure you have a home for that at harvest. … I'd have a conversation with wherever you expect to bring those excess bushels that you don't have room for to make sure you have a place to go with it."
Here are a few ways farmers can be price makers in a year when the high hit in February:
Tackle three things
- Take advantage of market carry. “There are people out there who may be sold via hedged new crop grain in the December and November contract, they have a wonderful opportunity to grab to store that grain and move that hedge out to the May or July contract,” Usset said. “Even if they did a hedge to arrive contract, they would have an opportunity to roll that hedge forward once. That's a great opportunity to pick up some extra money in the carry and to buy some time for the basis to get better."
- Focus on incremental gains. “If you haven't got the grain priced... know you're not going to end up with a wildly high and profitable price, but it'll beat the heck out of the harvest price,” Usset said.
- Secure delivery options. Usset expects to hear elevators laying down this policy: “I won't guarantee you a home for your grain unless it's priced with me before harvest."
Sitting on strong supply
Without a significant production disruption, Usset sees little upside potential.
“I like to think that demand side of the corn equation is pretty good,” Usset said. “Exports are good. Feed demand is good. You've got cattle over $2 a pound. The dairy and hog markets are good. They're not as great as cattle, but they're good. The feed costs are down. I see a lot of positive things.”
Now the grain market needs one negative that it can turn into a positive.
“We need someone on the supply side to trip up worldwide,” Usset said.
Hear more from Usset on Ag Marketing IQ In Depth.