Let me start with five philosophical marketing quotes that I believe apply to today's marketing climate:
Those who brood over their past mistakes almost always miss the next opportunity.
The greatest loss in a market is not money, but the loss of self-confidence.
Unhappiness consists of not knowing what you want in a market and killing yourself to achieve it.
Commodity marketing is an art, not a science.
It's not the “facts” that are important in a market. What is important is what people “think” the facts are.
How fast things can change. In June, the vast majority (fortunately not all) of producers were more concerned about how to pay taxes on their huge incomes than they were about marketing. They “knew” the market could never go down again.
And now the majority is scrambling with “What do I do now?” Human nature never changes.
MARKETS TOP ON bullish news, and the majority of people want to believe every ounce of it. Big bulls are always followed by big bears, and this one has been no different. But now we need to get back to reality and face some marketing decisions that are entirely different than what we faced last year.
As the previous quotes emphasize, one of the things everyone needs to do is to quit brooding over last year's mistakes. This is a new marketing year and we need to move forward — not backward. Goals and objectives will be different in 2009 than they were in 2008.
Develop a marketing plan based on profitability for at least half of your crop. If you want to gamble, do it with a small percentage once prices move above breakeven. Don't bet the farm in markets such as this. The house might win.
KNOWLEDGE PLAYS SMALL PART
As the diagram shows, when some farmers believe knowledge plays a major role in marketing, I would beg to differ. If God himself guaranteed all farmers exactly what was going to happen, 95% would still wait to see if He was right.
The bigger part of marketing is the mental/emotional side. Particularly after last year, some producers are going to have difficulty struggling emotionally with the mistakes that were made. Get over it and move on.
Markets almost always give everyone a second chance. The second chance in this case will not likely be $7 corn or $15 beans, but it could well be $4.50 corn and $9.50 soybeans. This is the new marketing plateau many have been waiting on. Not what some thought a year ago, but let's keep things in perspective.
These prices are still exceedingly high compared to what we were looking at two years ago (expenses are as well). Because of the timing of marketing decisions and the increased input costs resulting in increased risk, marketing decisions are now much more important to every producer than any time in the last 10 years. 7
Richard A. Brock is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report. Fora trial subscription and information on Brock services, call 800-558-3431 or visit www.brockreport.com.