Don't Wing It! Essential Marketing Rules for Farm Profitability

I spent 15 years in higher education, teaching 18–22-year-olds. One of the many things I learned while I was there was that people really hate rules! At the same time, people don’t function very well without rules! Students would always groan about the “rules” of an assignment, i.e., how many pages does it need to be, no notes may be used, no calculators, etc. So, one day, I changed my strategy and gave them an assignment with no rules. Their job was to write a paper about a topic in production agriculture. I gave them zero specifications and zero expectations. You would have thought I took away their cell phones! I realized that while they did not like the rules I set for them, they really disliked the anarchy that resulted when there were no rules to follow.

Don't Wait for Disaster: Avoiding Marketing Anarchy

What does this have to do with marketing your crop? More than you may realize. The difference is that you, as the business owner and chief marketing officer, must create, implement, and follow the rules. What happens when you don’t create rules to follow? Anarchy. It creates that feeling where you are not sure where to turn, so you dig your heels in and wait. And waiting sometimes creates more pain. I work with a lot of producers who have related to that imagery, and one thing I have realized is that misery loves company.

Beyond "Expert" Opinions: Choosing Reliable Market Information

Possibly worse than not having rules, though, is not following the rules you have set out for yourself. I see this a lot in speculative trading. A customer buys a futures contract based on some fundamental or technical idea. But when that same fundamental or technical reason changes, rather than exiting the position and taking the loss, the customer digs in and holds out until they can no longer stand the pain. We live in a world today where everyone not only has an opinion, but they also have a platform where they can share their opinion. If you spend enough time searching, you can find someone who will help validate your thoughts and ideas.

📸: @Sadeugra via Canva/Featuring a professor writing the words "know the rules!" on a chalkboard.

I have mentioned before that there is no “cookie-cutter” marketing strategy that will work for every grower. Each farm is its own organism with different capital constraints, cash flows, and attitudes toward risk. But here are a few key rules that we like to get producers to think about:

1. Know your cost of production. We know that this is a moving target that depends on weather throughout the growing season and that inputs can and do change based on the growing season as well. Develop or find and use a product that helps you track those costs and keep your break-evens as up-to-date as possible. This way, we at least know where the goalposts are too.
2. Choose your sources of information and resist the urge to find new sources where you get the information you want to hear. History is littered with fallen empires where the leaders punished those who gave them bad news.
3. Resist the urge to pull offers. In our business, we call these CIC, or “Cancel if Close,” orders. The farmer sets the price target and has the "order" working. As we near the target, the "order" is canceled or moved higher.
4. Lastly, never forget that no decision is still a decision, and often it is a poor one! As much as we don’t “like” rules—speed limits, paying taxes, wearing your seatbelt—I can guarantee our lives would be much worse without them. In fact, my small, unscientific experiment showed that even my best students struggled mightily without rules.

This content is being brought to you in partnership with Grow Smart Live and AgMarket.Net. BASF provides the information in this article as a service to its customers; however, the views expressed by guest writers are their own and do not necessarily reflect the views of BASF. The information contained in this article is not intended as, and should not be construed as, financial advice. It is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.