Video 3 - 2020 Virtual Nebraska Soybean Day and Machinery Expo

Deloris Pittman Author

12/21/2020 Added

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Post-Harvest Marketing Tips Ed Usset, Grain Marketing Specialist, University of Minnesota

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[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...

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Video 3 - 2020 Virtual Nebraska Soybean Day and Machinery Expo

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