The baseball season is over, but Brewers’ fans will bask all winter, and probably lots longer, in the glow of the franchise’s first World Series championship.
The title isn’t the first for Milwaukee, and I’m not talking about the Packers or Bucks. Long before the Brew Crew reigned supreme, the Braves won the crown in 1957, thanks to the bat of Hammering Hank (Aaron), among others.
But then the team slinked off to Atlanta in 1966, betraying all those fans in the Badger state. Bringing the game back to Milwaukee likely seemed a longshot. But that’s just what Bud Selig did.
Selig was a car salesman too and knew it was a tough ask to return the sport to his city. I met him in 1974 as he barnstormed to drum up support for another team. His plan sounded like a too-good-to-be-true deal, but he kept plugging away.
Selig’s pitch: Milwaukee is a major league city and deserves a team in the bigs. Talk is cheap, so he let his customers seal the deal with their butts; he put fans in seats at minor league and exhibition games to prove his point. I was one of them, seeing Hall-of-Famer Robin Yount’s first Saturday with the team.
OK, so you don’t own a baseball team, though maybe your farm sponsors one in slow-pitch or Little League, and you’re now wondering what this journey into baseball history has to do with marketing your grain.
Here’s where we play ball: Success means knowing your customers, just like Bud. Let’s start by learning their headgear and using them for insight into their grain pricing priorities. Consider them your runner signs:
Feed caps. Ultimately, your grain buyer wears one, at least in the office. They’re comfy, highly branded and offer protection from the sun but not falling objects. That makes them appropriate for paper pushing, and in the grain business that means basis trading.
Those with grain to sell look to do it when they can receive a stronger basis, while buyers seek the opposite extreme. Cash corn and soybeans are priced higher than a year ago in Iowa, for example. But corn basis is a few cents weaker, while soybean bids are 50 cents lower.
A farmer wants to sell when basis is high. A grain buyer wants to buy low.
Hard hats. The grain business means working around lots of machinery and tons of grain. Physically moving corn and soybeans in and out of trucks, bins and rail cars risks a hit on the head. But that’s life in the cash market.
Transportation costs are a major factor in basis, which otherwise tends to be stronger when supply is tight or demand is strong. The price of moving grain in and out of position can affect either side, shifting supply to areas that are tight or moving it away from those with a surplus.
Fuel is the big dog affecting this expense, and diesel ended October at $6.35 a gallon – pain at the pump that raised trucking costs nearly 71% year-on-year. Rail was flat, barges were up 21%, but another big hit came on the open seas, where ocean-going vessels were around 30% more expensive to run thanks to wars in Ukraine and the Middle East.
Fedoras. If the only stains on their hands come from ink, they’re probably a speculator, or “investor,” who buys and sells futures in hopes of a profit. These traders aren’t interested in using corn or soybeans directly, only in profiting as prices go up or down. Keep an eye on them.
These funds sold corn over the past two months, though their bearish bets aren’t especially large. Overall, they’re still net long, but ownership is transitioning to commercials as farmers move grain off the combine, triggering hedges by merchandisers.
The same holds true for soybeans, where funds built up an even larger net long position before slowly turning the bullish ship around.
So, pick your headgear wisely both for who you deal with and what you don’t. Otherwise, you risk the George Gobel look: brown shoes with a tuxedo. Something that worked for a 1960s humorist but doesn’t wear well on a farm.
Better to be Selig, who ultimately wore his hat all the way to the Major League Baseball Commissioner’s office, the Hall of Fame, and this year gets a bit of the credit, albeit posthumously, for a dream season and the Brewer’s first World Series championship.