Wednesday, October 25, 2006

Fighting the last war...

I had a chance to visit with folks from Cargill yesterday when they came to my farm for an interview to be aired in upcoming weeks on US Farm Report.

I have been using their ProPricing contracts for years - for what that is worth - but my experiences this year have left me re-thinking this strategy. Guys who did nothing look like geniuses right now, and forward selling for 2007 seems like a non-starter. The Cargill guys admitted the program was a tougher sell this fall.

As I pondered deep thoughts about these developments in the combine zipping through very mediocre corn (remember the bad planting season I whined about last spring?), I noted the things I knew:
  1. Am I going to plant more corn next year than usual? Yes.
  2. Am I reluctant to forward price that production even at prices I would have given my second-favorite power tool for just 4 months ago? Yes
  3. Can I picture a scenario where prices don't keep going up and up and up? Nope
  4. Can I make any money at current price offers? Yeah, a little (heh-heh)
These answers convinced me I was planning a trip to "Greedyville". My brain is rearranging facts to make me happy.

I will re-sign with the Cargill Pros for my fall 2007 delivery corn, and may do my usual averaging spring contract as well. After all, consistency is the hobgoblin of little minds...

[No - they didn't pay me to plug the program - actually I paid them]

1 comment:

John Phipps said...

This comment via my home e-mail:

Absolutely right on with the strategy to “stay the course”—

U of I says best overall program is to price equal amounts 10 months of year—pick a day of the month and have the elevator do it

*no consulting fees

*no time spent pondering what to do—

*no whiplashing around getting in and out of market(commissions)