Video 3 - 2020 Virtual Nebraska Soybean Day and Machinery Expo
Deloris Pittman
Author
12/21/2020
Added
18
Plays
Description
Post-Harvest Marketing Tips
Ed Usset, Grain Marketing Specialist, University of Minnesota
Searchable Transcript
- Use the text input to search the transcript.
- Click any line to jump to that spot in the video.
- Use the icons to the right to toggle between list and paragraph view.
Toggle between list and paragraph view.
- [00:00:12.130]Very good, we're back again.
- [00:00:14.080]Welcome to the Nebraska soybean day
- [00:00:16.450]and typically we would say a machinery expo
- [00:00:19.490]but if you can tell where minus the machining part of it
- [00:00:23.480]due to the pandemic and doing this virtually
- [00:00:26.230]but, on behalf of Nebraska Extension
- [00:00:29.090]and in Nebraska Soybean Board
- [00:00:31.300]and the Saunders County Soybean Growers,
- [00:00:33.410]we welcome you to this educational program.
- [00:00:37.700]As you can tell in the chat box,
- [00:00:39.160]we've had many guesses as to where this field
- [00:00:41.490]might be located, that's in the back backdrop of my screen
- [00:00:47.010]all the way from Brazil to Utica of Nebraska.
- [00:00:51.790]I doubt whether if you heard of Utica of Nebraska
- [00:00:54.990]you could find a field without some corn in the horizon,
- [00:00:58.600]and the answer to this question is Grant County Nebraska.
- [00:01:02.480]So, that's Southwest part of the state
- [00:01:04.670]for those of you not familiar with Nebraska counties,
- [00:01:08.380]and this is a very large field of soybeans.
- [00:01:11.330]So with that, this morning I had the pleasure of having
- [00:01:16.720]Eddie Fast with us.
- [00:01:17.720]Eddie is the grain marketing economists or the center
- [00:01:21.984]for farm management at the University of Minnesota.
- [00:01:24.760]So, Eddie is now going to speak to us
- [00:01:27.780]about post-harvest grain marketing.
- [00:01:30.660]And I can't imagine anybody would
- [00:01:33.500]harvest their grain and then think about marketing it.
- [00:01:38.140]I can't imagine it either Keith, but here we go.
- [00:01:43.510]Welcome back,
- [00:01:44.549]we're down here today,
- [00:01:46.440]you're gonna be tired of that son of a gun
- [00:01:49.430]from the University of Minnesota
- [00:01:51.980]who has graciously not taught football the whole time
- [00:01:55.980]while here.
- [00:01:57.620]If I may interject the reason I don't talk about football
- [00:02:01.410]with Nebraska and Minnesota is, I have a scar on my back.
- [00:02:06.000]I don't know if you know this but back
- [00:02:08.060]I believe in the seventies.
- [00:02:11.510]Minnesota and Nebraska before Nebraska
- [00:02:14.090]became part of the big 10, they used to have a annual game
- [00:02:20.120]for years in the fifties, sixties, and seventies
- [00:02:25.167]and Nebraska once beat the gophers something 80 to six
- [00:02:31.970]I believe, I don't remember well but once at the game.
- [00:02:37.530]I went with my dad to that game.
- [00:02:40.460]So, I don't talk Nebraska and gopher football.
- [00:02:44.120]Nice to see some success on our part recently
- [00:02:47.180]but I remember the history well.
- [00:02:50.070]Okay.
- [00:02:50.903]Some Grain Marketing Tips from my best friends
- [00:02:53.680]just some things to think about before and after harvest.
- [00:02:58.430]Again, thank you to all the sponsors that made this happen.
- [00:03:02.890]Let's meet a few people.
- [00:03:07.630]Barney Binless, Aunt Tilly,
- [00:03:09.480]You've met her but we're gonna review this again,
- [00:03:12.140]Peter Paperfarmer, May Sellers, and Hank Holder,
- [00:03:16.080]you've met somebody, some you haven't
- [00:03:18.380]but I think they have a message for us about marketing.
- [00:03:22.550]Every one of them.
- [00:03:24.120]A little bit on my methodology,
- [00:03:26.150]I've begun a couple of years ago using Iowa average prices.
- [00:03:30.920]Please don't get hung up on Iowa numbers.
- [00:03:33.610]You know, because the tendencies in Iowa at the tendencies
- [00:03:38.670]in Nebraska, they're the tendencies in Minnesota.
- [00:03:42.240]If I had 30 years of data
- [00:03:44.800]from Fremont, Nebraska,
- [00:03:47.900]I would show you the relatively speaking the same results.
- [00:03:53.740]That exact basis is a little different but relatively.
- [00:03:57.930]I like to look for strong tendencies
- [00:04:00.320]nothing's a hundred percent
- [00:04:01.840]but I like to look for things that work more often
- [00:04:04.830]than that, and I mentioned earlier
- [00:04:07.130]these looking at large differences,
- [00:04:09.570]I think they speak to something when a one approach
- [00:04:13.130]to marketing has the opportunity to beat the other
- [00:04:16.300]by a wide margin and not a few cents.
- [00:04:19.730]While you've met Barney,
- [00:04:21.250]and he is our benchmark.
- [00:04:22.872]He has no marketing plan, no storage, no interest.
- [00:04:26.160]He's someone I can compare to as we explore
- [00:04:29.430]these marketing ideas.
- [00:04:33.730]Harvest dates, my characters I mean the Northern Plains,
- [00:04:39.350]so, when I think of wheat, I think of hybrid spring wheat.
- [00:04:42.800]But when I mentioned a harvest state,
- [00:04:45.580]that's the Friday between October 12-18 for corn,
- [00:04:49.544]the Friday and the week before between October five and 11
- [00:04:53.626]for soybeans.
- [00:04:56.830]Aunt Tilly.
- [00:04:57.663]You know, we met her before but let's look at this again.
- [00:05:01.370]She likes to keep it simple.
- [00:05:02.920]She's crisis 20% of a new crop grain in four months,
- [00:05:06.980]March through June, regardless of low prices.
- [00:05:09.947]And by the way,
- [00:05:10.970]today, I've talked about two different
- [00:05:13.930]pre-harvest marketers.
- [00:05:15.790]Aunt Tilly and Terry.
- [00:05:19.240]One had, Aunt Tilly has no minimum price,
- [00:05:23.020]Terry does have a minimum price.
- [00:05:26.930]And you're asking,
- [00:05:28.300]well, which is it had?
- [00:05:31.050]I mean, do I need to have a minimum or not?
- [00:05:36.300]Its a decision you have to make.
- [00:05:38.360]I feel in the world of soybeans in particular,
- [00:05:42.040]I want a minimum price.
- [00:05:43.540]I'm not gonna do like Aunt Tilly.
- [00:05:45.670]Even though her results will impress you here,
- [00:05:49.870]I wanna have the minimum price
- [00:05:51.870]particularly in soybeans and in wheat.
- [00:05:54.570]I got to tell you in the world of corn,
- [00:05:56.990]doesn't seem to make a difference.
- [00:05:58.740]It can from one year to the next,
- [00:06:01.690]but bond term it hasn't seemed to make a difference.
- [00:06:05.530]She takes action between the fourth and the 10th
- [00:06:08.030]of each month.
- [00:06:09.340]And by the way for spring wheat
- [00:06:11.460]and if you were to think of winter wheat,
- [00:06:14.350]you don't want to be pricing wheat in June.
- [00:06:16.550]So, we move it all back a month and starting February.
- [00:06:20.040]And of course the final 20%
- [00:06:22.070]is sold at Barney's surface price.
- [00:06:25.410]Well, Terry and corn has a 16% advantage
- [00:06:29.850]beating Barney 24, 32 years and a years greater than 10%
- [00:06:36.257]almost a three to one margin.
- [00:06:40.040]Pretty impressive, not perfect, but impressive.
- [00:06:42.840]Soybeans, 24 cent advantage
- [00:06:47.450]beating Barney and two out of three years,
- [00:06:51.020]and then with the modest edge years greater than 10%.
- [00:06:56.070]Again, in the work with pre-harvest mark and soybeans,
- [00:07:01.810]I like to have a minimum price objective.
- [00:07:06.810]I told you about my book, I won't do that again.
- [00:07:09.750]Let's move quickly to Peter Paperfarmer.
- [00:07:12.800]I guess the tip with Aunt Tilly is, I want to do some
- [00:07:17.140]pre-harvest on this marketing, okay?
- [00:07:19.120]That's the tip.
- [00:07:20.980]Is there a value in it?
- [00:07:22.330]Yes, there is.
- [00:07:24.320]Peter Paperfarmer, is gonna answer a question for us
- [00:07:29.410]and whether or not options add value.
- [00:07:35.320]After harvest like Barney, Peter has no storage each year.
- [00:07:39.070]He re-owns harvest sales.
- [00:07:42.130]He makes a sale at harvest at the same time as Barney,
- [00:07:45.500]but he re-owns with that at-the-money call options
- [00:07:48.777]and the July contract and holds them to expiration.
- [00:07:53.607]He's going to buy an at-the-money July call option
- [00:07:57.840]corn and soybeans on November 1,
- [00:08:00.350]hopes that the expiration and the third week of June.
- [00:08:04.890]How is Peter doing in corn?
- [00:08:09.840]Well, Peter is giving up 6 cents a bushel.
- [00:08:14.370]Years with more than a 10% margin,
- [00:08:17.370]well, Peter's had three of them,
- [00:08:20.300]but nine times Barney has beaten Peter by more than 10%.
- [00:08:24.200]That's another way of saying that the cost of the option,
- [00:08:28.000]was greater than 10% of the value of corn at harvest.
- [00:08:34.480]That's all that's saying.
- [00:08:36.330]Peter has only beaten Barney and five of 31 years.
- [00:08:41.490]He doesn't have a very good record in corn or in wheat.
- [00:08:46.500]He does have a decent record in soybeans
- [00:08:49.395]and past performance is no guarantee of future results
- [00:08:54.240]but Peter said some great soybean here
- [00:08:56.650]over the last 30 years.
- [00:08:59.808](coughs)
- [00:09:01.210]Excuse me.
- [00:09:03.312](coughs)
- [00:09:04.900]Before harvest, Peter's gonna mimic Terry Timer
- [00:09:10.340]who re-owns each sale with the call options.
- [00:09:15.500]Terry we've met before and we're gonna meet her again
- [00:09:18.350]in a moment,
- [00:09:19.183]He's gonna get Terry's pre-harvest price,
- [00:09:21.699]plus the profit or loss from buying
- [00:09:24.190]an at-the-money December corn
- [00:09:26.110]or November soybean call option
- [00:09:28.800]and holding it to mid September.
- [00:09:32.000]You met Terry last time in the discussion
- [00:09:35.340]of a pre-harvest marketing plan,
- [00:09:37.830]takes action on pre-harvest pricing
- [00:09:41.550]at the same dates as Aunt Tilly.
- [00:09:43.680]The difference is Terry's got a minimum price,
- [00:09:46.710]so she's not always taking action
- [00:09:49.390]it's gotta be about the minimum.
- [00:09:52.140]Well, first of all,
- [00:09:53.260]I wanna compare Peter to Terry.
- [00:09:56.508]And you note that, okay.
- [00:09:59.270]Peter is averaging 6 cents a bushel, less than Terry.
- [00:10:03.140]They're doing the same thing on the same day.
- [00:10:05.830]Peter insists on re-owning with the call.
- [00:10:08.530]The calls costs Peter money.
- [00:10:11.400]I wanna make that point.
- [00:10:14.200]Long-term they cost money,
- [00:10:15.970]that every year he's had a few moments,
- [00:10:18.280]but long-term they've cost him money.
- [00:10:21.630]But now compare Peter to Barney.
- [00:10:24.350]Peter is beating Barney by 10 cents a bushel.
- [00:10:27.070]Think of my Uncle Buck and how to get $4 corn,
- [00:10:30.720]Peter and Uncle Buck are kind of similar,
- [00:10:33.140]except Peter's got the minimum price.
- [00:10:36.700]So, on the one hand,
- [00:10:39.320]I'm not impressed with options because I could do better
- [00:10:42.650]without them being just Terry,
- [00:10:44.620]on the other hand, Peter is beating Barney by a dime
- [00:10:48.370]and that's good.
- [00:10:50.556](clears throat)
- [00:10:51.389]By the way, I got to ask this,
- [00:10:53.080]how often would you expect to profit from a simple strategy
- [00:10:58.210]of buying an at-the-money call,
- [00:11:00.260]and holding it to the expiration?
- [00:11:02.690]This doesn't apply just the soybeans,
- [00:11:05.020]or the corn, or to Microsoft stock,
- [00:11:09.000]we can apply this to anything.
- [00:11:10.890]Markets move in three directions people.
- [00:11:13.460]They're either going up, they're going down,
- [00:11:15.970]or they're going sideways.
- [00:11:18.130]Now a fight by a corn, the only thing that helps me
- [00:11:21.050]is if the market goes up so the answer must be 33%, correct?
- [00:11:26.410]No that's wrong!
- [00:11:28.020]Because I paid for the corn.
- [00:11:30.290]And if I paid 25 cents,
- [00:11:32.550]if I pay 50 cents for a soybean corn,
- [00:11:36.370]and the market goes up 30 cents, I still haven't made money.
- [00:11:40.060]It's gonna be something less than a third,
- [00:11:42.780]and that often said that it's around 20 to 25% at that time.
- [00:11:48.940]In theory, that's how often I should make money.
- [00:11:52.580]I've now got 30 plus years of data on Peter Paperfarmer
- [00:11:57.450]on three different commodities,
- [00:11:59.710]before harvest and after harvest.
- [00:12:01.670]I got a lot data on Peter.
- [00:12:04.300]So, since 1989, how often is Peter Paperfarmer profited
- [00:12:09.490]from buying at-the-money calls before and after harvest?
- [00:12:14.280]That would be 37 times and 164 tries or 23% of the time.
- [00:12:20.250]For those of you who are leery of the theory
- [00:12:24.380]and the reality, I present the evidence right here.
- [00:12:28.960]Peter is doing just as we would predict him to do.
- [00:12:33.130]Do options, add value?
- [00:12:35.390]I'm gonna tell you that I never say never to adoptions,
- [00:12:39.540]but at best, the record is mixed with call options.
- [00:12:43.430]Does that mean that it has no place in marketing?
- [00:12:46.140]No, it does have a place selectively.
- [00:12:49.540]But if you're expecting options to lead you
- [00:12:52.390]to the promised land,
- [00:12:55.180]I don't think it's gonna happen.
- [00:12:59.360]By the way, I run a website,
- [00:13:01.450]a trading game called Commodity Challenge.
- [00:13:05.550]It is used by hundreds of the schools and colleges
- [00:13:09.210]throughout the country and private groups every year,
- [00:13:13.160]it's a mobile-friendly, you can put it on your smartphone,
- [00:13:16.650]it's educational, it's free.
- [00:13:19.400]And I would like to employ you to explore this site.
- [00:13:24.280]You can join an open game or create a private game
- [00:13:28.820]for your own group,
- [00:13:30.270]and I even started in this pandemic related
- [00:13:33.660]shut down of Schools,
- [00:13:35.370]I created an online guided course called getting started
- [00:13:40.460]with Commodity Challenge and I'm happy
- [00:13:43.100]to note that dozens of the high schools and colleges
- [00:13:46.562]have adapted it in the last six months.
- [00:13:50.770]Okay.
- [00:13:51.603]May Sellers.
- [00:13:52.960]May Sellers speaks to the need for an exit plan.
- [00:13:56.750]You met May earlier, but let's meet her again.
- [00:14:00.190]She has on-farm storage,
- [00:14:02.210]she puts her crop in the bin, 80% of her crop.
- [00:14:05.790]She only has room for 80% of her crop,
- [00:14:09.160]she puts it into storage, and she holds it on price,
- [00:14:13.580]to sell in late spring.
- [00:14:15.230]She sells in the last week of May.
- [00:14:19.180]By the way, I could have easily called her June sellers,
- [00:14:22.940]and had her sold in the first half of June.
- [00:14:25.470]But I picked what I picked.
- [00:14:27.799](coughs)
- [00:14:29.080]Her price will be the price in the last week of May,
- [00:14:32.860]less variable storage costs.
- [00:14:35.070]I'm gonna charge her each cents shrank on corn,
- [00:14:39.150]11 cents shrank on soybeans,
- [00:14:43.030]and I'm gonna charge her interest on her money.
- [00:14:48.010]This is the data.
- [00:14:49.100]Remember that 20% of her price is Barneys harvest price.
- [00:14:59.440]There's a long-term trend of Minnesota corn prices.
- [00:15:03.980]Is it clear to see why May likes to sell in late May
- [00:15:08.200]or early June?
- [00:15:10.060]It's right there in the chart.
- [00:15:13.390]Illinois Soybean its right there in the chart.
- [00:15:16.520]By the way, the Nebraska soybeans, Nebraska corn,
- [00:15:20.060]same patterns.
- [00:15:24.630]I have the data and I should have created
- [00:15:26.880]the Nebraska charts,
- [00:15:29.240]but it'd be easier to just rename the Illinois Nebraska
- [00:15:32.760]and just lie to you.
- [00:15:33.982]But I won't do that, but just trust me.
- [00:15:36.450]They look alike.
- [00:15:40.130]By the way, May sellers takes a risk when she holds on
- [00:15:44.020]price grain in the bin,
- [00:15:45.480]and nothing speaks to risk more than the year of COVID-19
- [00:15:49.660]this last year.
- [00:15:52.780]Here's that chart I showed you earlier,
- [00:15:55.210]little different scale on the left-hand side,
- [00:15:57.820]the the seasonal pattern of Minnesota
- [00:16:01.220]and Nebraska corn prices being lowest than the fall
- [00:16:04.510]highest in the spring.
- [00:16:06.050]Why did I change my scale on the y-axis?
- [00:16:12.410]Because I wanted to show you this year.
- [00:16:16.010]This is what what happened to cash corn prices in Minnesota,
- [00:16:19.580]and Nebraska, and Iowa, the whole corn belt in 2019/20.
- [00:16:27.940]It was May seller I've got 30 years of data over 30 years
- [00:16:32.550]It was her worst year on record.
- [00:16:35.780]That's what COVID-19 did.
- [00:16:38.880]Okay.
- [00:16:41.320]By the way, that horrible year I just showed you,
- [00:16:43.971]it's in the numbers I'm showing you.
- [00:16:46.750]May sellers is beating Barney by an average of 16 cents
- [00:16:50.680]a bushel, she's beating Barney in 19 about 31 years,
- [00:16:59.520]Barney beats May at third at the time.
- [00:17:01.500]That's right.
- [00:17:02.333]But you know what?
- [00:17:03.166]A lot of those times that Barney beats May,
- [00:17:06.500]May and Barney may have had the same price
- [00:17:10.270]or May even had a few cents more than Barney,
- [00:17:13.870]but once I accounted for storage costs and interest costs,
- [00:17:18.790]May ends up at less than Barney.
- [00:17:21.260]There were four years including this last year, 2019/20
- [00:17:28.260]when Barney beat May by more than 10%.
- [00:17:32.230]But as the data shows, May's beaten Barney 11 years
- [00:17:38.330]a third at the time by more than 10%.
- [00:17:41.200]Again, I'm looking for those big years and May's taking
- [00:17:46.200]a risk but it appears to be paying off overtime.
- [00:17:50.490]Soybeans, she's beating Barney by 50 cents a bushel
- [00:17:54.567]and that includes a horrible year in the last year
- [00:17:57.960]beating Barney two out three years,
- [00:18:00.410]and a margin of greater than 10%, more than two to one odds.
- [00:18:06.550]I think that speaks to those who risk in what May does
- [00:18:10.750]many of you are holding unpriced grain in the band,
- [00:18:13.990]It has risk, you know that,
- [00:18:16.490]but over time it seems to pay off.
- [00:18:20.800]Here's the deal with May Sellers.
- [00:18:22.990]She has an exit plan.
- [00:18:24.640]She has grain in the bin,
- [00:18:26.370]unpriced, and she knows when she's getting out
- [00:18:31.480]of this people,
- [00:18:32.840]at the end of May she's done.
- [00:18:34.850]When loser draws, she's done.
- [00:18:37.440]So I'm gonna ask you as producers with unpriced grain
- [00:18:42.130]in the bin, unpriced soybeans, unpriced corn,
- [00:18:46.130]what's your exit plan?
- [00:18:48.710]Are you waiting for a certain time?
- [00:18:50.890]Are you waiting for a certain price?
- [00:18:53.340]Are you reading the latest news hoping someone will give you
- [00:18:56.810]a clue as to when to sell?
- [00:18:59.350]You need an exit plan.
- [00:19:01.240]May Sellers has one and it's paying off for her over time.
- [00:19:05.540]You need one too.
- [00:19:09.450]By the way I'm low bummed out here in Minnesota.
- [00:19:11.870]We don't have any snow in the twin cities,
- [00:19:14.450]we don't have much snow in the state,
- [00:19:16.060]we had some storms six, eight weeks ago and had snow,
- [00:19:20.330]but it all melted.
- [00:19:22.070]I do something every year called the American Birkebeiner
- [00:19:26.240]and it's a big Ski Race up in Northern Wisconsin,
- [00:19:29.960]It's fashioned after the Norwegian Birkibeinar
- [00:19:33.650]it's a fun event and makes my winter go by.
- [00:19:37.380]My spouse does it with me,
- [00:19:39.800]and we do it with number of family members.
- [00:19:41.920]Its a lot of fun.
- [00:19:42.760]It's a 55 kilometers, 32 miles in a Ski Race.
- [00:19:49.040]I don't win the thing people
- [00:19:50.560]I just try to finish.
- [00:19:52.460]I also like doing something called the vasaloppet,
- [00:19:56.520]which is a Ski Race in Mora, Minnesota
- [00:19:59.930]about 80 miles North of the twin cities,
- [00:20:03.080]and I'm just showing you the Jersey number I got
- [00:20:07.470]a little over a year ago.
- [00:20:10.120]You know what the devil's number is?
- [00:20:12.660]Six, six, six.
- [00:20:14.780]Well, what does that make me?
- [00:20:16.670]I'm a little concerned.
- [00:20:18.430]Okay.
- [00:20:20.140]Hank Holder, don't store grain too long.
- [00:20:25.530]Hank is our perennial bull.
- [00:20:27.230]He's always convinced that prices
- [00:20:28.507]are gonna go a few cents higher
- [00:20:30.600]but he only has enough storage for one crop.
- [00:20:33.650]So, each year he's forced to sell his crop
- [00:20:39.033]in the week before harvest to make room for the new crop.
- [00:20:42.170]His price is essentially next year's harvest price,
- [00:20:46.140]less the storage costs incurred with that.
- [00:20:49.530]And by the way, just like May Sellers,
- [00:20:52.250]she hankers forced to sell 20% of his crop at harvest
- [00:20:57.850]cause he only has room for 80%.
- [00:21:02.980]Again, this is the detail on it, I won't go through it
- [00:21:06.590]it's very important to me that you understand
- [00:21:10.060]that all my characters have a pre-established method
- [00:21:13.800]of marketing their grain.
- [00:21:15.500]And I am not cherry picking data to make someone look good
- [00:21:19.360]or someone looked bad.
- [00:21:20.770]It is what it is now.
- [00:21:23.390]Barney's benchmark in the case of Hank,
- [00:21:30.670]I don't wanna compare Hank to Barney.
- [00:21:33.670]I'm on compare Hank to May Sellers.
- [00:21:36.060]These are two producers doing the same thing.
- [00:21:39.100]Selling 20% at harvest, storing 80% of their grain
- [00:21:43.027]unpriced, corn, and soybeans.
- [00:21:46.560]The only difference between May and Hank is how long
- [00:21:49.740]they hold the grain.
- [00:21:51.160]May gets out at the end of May.
- [00:21:54.510]Hank continues to hold the corn and soybeans
- [00:21:58.480]and other I think it's 17 or 18 weeks up until the week
- [00:22:03.480]before harvest.
- [00:22:05.710]How are we doing here?
- [00:22:08.530]May is beating Hank in corn by 40 cents a bushel.
- [00:22:19.490]She is beating Hank by more than 10% in 20 of 31 years.
- [00:22:27.280]Hank beat May by more than 10% in five of 31 years.
- [00:22:33.210]I want you to think about this moment.
- [00:22:35.230]There are only 31 years of data in 25 of those years,
- [00:22:41.040]either May or Hank beat the hell out of the other.
- [00:22:43.820]It wasn't a close game, 25 at 31 years.
- [00:22:49.060]In other words, when we get to the end of May this year,
- [00:22:52.400]there's a pretty good chance that either May
- [00:22:55.010]is gonna beat the hell out of Hank,
- [00:22:56.830]or Hank is gonna beat the hell out of May.
- [00:22:59.030]They don't come in close very often.
- [00:23:02.280]Unfortunately for Hank,
- [00:23:04.470]the ads against them are four to one.
- [00:23:09.060]Soybeans, May's advantage is 85 cents a bushel.
- [00:23:17.070]That's the average over 31 years May as beating Hank
- [00:23:21.260]by 85 cents a bushel.
- [00:23:24.550]Years greater than 10% and by the way I've got years
- [00:23:28.000]greater than Barney, I think that's a mistake.
- [00:23:30.260]I think that years greater than 10% maybe take half
- [00:23:38.930]the time but more than 10% Hanks had three years.
- [00:23:43.580]Once the decade, it beats May by more than 10%.
- [00:23:50.460]Hank is breaking what we call the 11th Commandment
- [00:23:54.220]of Grain Marketing.
- [00:23:55.557]"Thou shall not hold on on unpriced grain in the bin beyond
- [00:24:00.710]July 1."
- [00:24:01.780]Excuse me, people.
- [00:24:03.130]I have a mistake there that should say July 1
- [00:24:07.910]and June 1 for week.
- [00:24:10.330]My apologies.
- [00:24:11.570]It should say July one.
- [00:24:14.366]Would the pros ever ignore anything this apparent?
- [00:24:17.700]Well, they do it all the time.
- [00:24:22.700]This is a pro-farmer advice alert dated August 30th, 2017.
- [00:24:29.560]This is just so apparent to me and yet here is Pro Farmer
- [00:24:32.840]telling people two months after July 1,
- [00:24:36.660]time to finish up your old crop sales.
- [00:24:40.150]Really?
- [00:24:41.360]I'd have finished them two months ago.
- [00:24:43.400]They did it again in 2018 recommended something.
- [00:24:48.010]Thankfully they're not holding the whole crop.
- [00:24:50.190]They're holding 10 or 20%.
- [00:24:53.270]They did it again in 2019.
- [00:24:56.741]I tell people that if you're worried about missing
- [00:25:03.950]the bull market that comes in the summer from a drought
- [00:25:07.990]or something, and that's why you're holding your grain,
- [00:25:11.670]what I say is, why don't you sell your grain
- [00:25:14.980]and re-own it with the call option?
- [00:25:17.500]And of course the response I get is,
- [00:25:19.870]well call options cost money!
- [00:25:25.710]Take a look at Hank's results that appears
- [00:25:28.720]to be costing them money to.
- [00:25:31.920]Just think about it.
- [00:25:36.060]This was 2019, the price changed from May
- [00:25:39.340]to the end of August was 55 cents and of course
- [00:25:42.420]we're getting out of it now.
- [00:25:45.350]Okay.
- [00:25:46.670]Time for me to wrap up,
- [00:25:47.970]I've taken up a big chunk of your morning.
- [00:25:52.490]Let's review some of the tips from my friends Tilly
- [00:25:56.860]enjoys solid success with a very simple marketing plan.
- [00:26:01.260]Marketing does not need to be complicated.
- [00:26:04.130]I want you to think about the Terry Timer and Tilly.
- [00:26:08.590]You've met two people doing similar things.
- [00:26:11.420]I like having a minimum price as simple as Tilly is,
- [00:26:15.620]and it applies well the corn and the world of soybeans
- [00:26:19.670]have won a minimum price and right now,
- [00:26:22.230]we're above that minimum.
- [00:26:25.130]For Peter Paperfarmer, paper farming with call options
- [00:26:30.560]has at best really a mixed record of results.
- [00:26:34.660]I always say about options, use selectively.
- [00:26:38.310]If you're using them all the time,
- [00:26:39.810]I don't think you're going to get there.
- [00:26:42.590]May Sellers has an exit plan,
- [00:26:45.200]it's based on seasonal price patterns
- [00:26:47.750]and it works over kind of works.
- [00:26:50.356]What's your exit plan?
- [00:26:52.400]You've got an price grain in the bin.
- [00:26:55.020]And finally, disobeying the 11th commandment
- [00:26:58.340]of grain marketing that Hank Holder in a big way
- [00:27:03.920]he pays a big price for holding grain in storage too long.
- [00:27:12.540]We did this.
- [00:27:14.060]I introduced you to how to get $4 corn.
- [00:27:17.220]That is a workshop with a simulation game,
- [00:27:20.430]and if any of you are ever interested
- [00:27:23.070]in doing that, I've done that virtually online.
- [00:27:27.050]If you're interested, let me know.
- [00:27:29.820]Hopefully in another half a year, I can do it live.
- [00:27:33.310]And I would like to do that,
- [00:27:34.250]would like to maybe get back to Wahoo in the future.
- [00:27:38.090]There's my pre-harvest marketing plan for corn,
- [00:27:41.370]and we're not far away from getting started there
- [00:27:44.430]and soybeans, I could argue you'd get started right now
- [00:27:48.780]and then hope like heck, you're wrong.
- [00:27:51.000]And it keeps going higher.
- [00:27:54.180]Keith and the organizers of this great event may ask you
- [00:27:59.330]for some feedback on the day.
- [00:28:01.470]I want you to know I'm used to getting critical reviews
- [00:28:04.380]because I asked my students every year to tell me
- [00:28:07.260]how I'm doing,
- [00:28:08.540]so, I'd like to inspire you with for real comments
- [00:28:12.100]from my students.
- [00:28:14.470]One student said, "my favorite class taken
- [00:28:16.800]in four years at the U of M."
- [00:28:18.950]I'll try not to hurt myself, patting myself on the back.
- [00:28:23.267]"please move the class to the afternoon,
- [00:28:25.400]so I don't fall asleep."
- [00:28:27.910]People it's hard to be a 20 year old college student.
- [00:28:31.410]They're just days and nights filled with opportunities.
- [00:28:38.280]So, you know, what can I say?
- [00:28:42.110]Fast Eddie was genuinely the most helpful
- [00:28:44.790]and informative instructor I've had in my learning career.
- [00:28:48.420]Wonderful compliment.
- [00:28:49.830]I don't know where the help of Fast Eddie came from.
- [00:28:52.460]I've never introduced myself as Fast Eddie
- [00:28:55.230]but there it is.
- [00:28:56.434]And finally, for those of you who think I'm getting
- [00:29:00.200]a little too full of myself, this too was a real combat.
- [00:29:05.027]"The instructor was...
The screen size you are trying to search captions on is too small!
You can always jump over to MediaHub and check it out there.
Log in to post comments
Comments
0 Comments