Lowered yield expectations are turning prices around and transforming farm profitability as harvest looms, making this a critical time for farmers to market their crops.
“We went from a situation where really maybe 60 days ago, the vast majority of farmers were just not profitable when costs are compared to where the price of their crops were,” said Nick Tsiolis, CEO and founder of Farmer’s Keeper. “Now we’re looking at really healthy profits for a lot of producers out there. … It is nice and it’s a gift when this type of stuff happens.”
Speaking on this week’s Ag Marketing IQ In Depth, Tsiolis warned farmers that counter-seasonal rallies demand careful risk management.
Tsiolis recommended farmers evaluate their sold percentage and financial commitments before harvest. In typical years, he prefers seeing producers 50% to 70% sold before combines roll, aligning with crop insurance guarantees. According to the company’s recent survey, however, producers have sold only 25% of their corn and 24% of their soybeans — leaving substantial room to capitalize on rising prices.
Storage decisions also require scrutiny. Tsiolis cautioned against commercial storage without a clear exit strategy.
“The vast majority of the time when we see farmers storing grain commercially at the elevator, they’re not selling when they see the market rallying at a high,” he noted. “They’re actually just selling when they need to pay a bill the next week or when they run out of time on the contract.”
Instead, Tsiolis advocated using options strategies — buying puts to see a price floor, or selling grain and purchasing calls to maintain upside potential. He emphasized discipline through setting offers above current market levels. He also encouraged an incremental sales strategy.
“You want to get the high of the market? Put an offer above where the market is,” Tsiolis said. “Every day you wait to sell your grain or do something is potential for the markets to go higher. So, you don’t want to miss out. But the reality is just like markets run up, markets also fall down. And we’ve seen that for the past few years here. That’s why it’s about spreading out your risk.”
To hear more about exercising a strong pricing strategy in a market with upside potential, watch Tsiolis on this week’s Ag Marketing IQ In Depth.