cancel
Showing results for 
Search instead for 
Did you mean: 
Honored Advisor

The Rawleigh man and Marketing

A comment this week about all the "tools" available to enable producers to market production at a profit, got me thinking about a subject I have wanted to make for a while.  It's Sunday and most everyone who reads here finds something more interesting to do today so I'll give it a go.  If it's blank on Monday you'll know it wasn't worth reading.

 

Sales --  My introduction to sales was an old guy, crippled with a "built up" shoe.  He was good, had that little roll of candy for me and my mom had a smile for him.  I could tell he was ok,  being age 6, mom's protection was my responsibility,   after the candy.

The Fuller Brush Man made it out that far on occasion as well.  Mom would listen if she had time.  I wasn't so enthused.  I didn't want to give Dad any new correctional tools.  Those little paddles with the ball on the string were enough for me.

Then along came a really good vaccum cleaner with a salesman.  Dad's instructions, "never let that guy in the house!"

 

In ag. we have a couple of good examples of the sale of products,  trade shows---- I call em "idea marts", and a great example in Kansas ---- The state fair---- a great example of what I want to point out about sales.  If you make a product, or sell a product worth the time of inspection, your generallly outside.  Then for all the things you don't know you need, there is the commercial building.  I call it the gauntlet.

There are either things you need or things you don't, but after that distinction there are things that are real and things that are nothing.

Dire Straits defined one way we spend a lot on nothing.

I think risk protection is a lot like that, maybe you'll need it, maybe you won't.

 

TWO QUESTIONS;

 

1.  How much of marketing talk is sales promotional?  I think it is hard to tell.

2.   Do you see the "commercial" building coming, or in marketing do you just suddenly find yourself in it??

 

 

I use some marketing tools.  But it seems that in marketing we do not do a very good job of distinguishing between our marketing and the commercial "for sale" tools.  In fact, if we are not careful, there are those who will convince us we are not marketing unless we pay for someone else to help us with it.

And the last four years we have seen folks telling us we need consultants for planting and spraying, and soil testing and organizing our tools.

Don't spend too much learning to market your own crop.

0 Kudos
18 Replies
Senior Contributor

Re: The Rawleigh man and Marketing

I think you are spot on!
0 Kudos
Honored Advisor

Re: The Rawleigh man and Marketing

You hit a hot button with your last sentence.

 

The most important thing in any business is marketing.

 

If your not willing to do it, you better have a wife that is good at it. 

 

I'm willing to wager a large bill that most that would "hire" it done will not be in business in five years or most likely quicker than that.

 

Broker commissions and  margin calls will eliminate them from being my competition.

 

 

 

0 Kudos
Veteran Advisor

Re: The Rawleigh man and Marketing

Marketing is tough. No doubt about it. No matter how we do there is always room for improvement. Or someone who averages a dime better human nature being what it is everyone wants to be top dog. IMO that is why so many are vulnerable to the folks in the "commercial building". Case in point is the constant p.. ing match among several on this forum
Honored Advisor

Re: The Rawleigh man and Marketing

Well, on the bear side for sure it`s flat out promotion, they want to beat the bulls into the ground and make them so without hope that they will sell at any price.  They are like a professional gambler that got the title to their house and pink slip to their car riding on everyone sitting at the table not having more than a "pair of 2`s".

 

Then you have clever endusers that don`t want to actually "kill the goose", that say "lock in your basis and deliver next July"  wink wink.  They want there to be eggs in the nest to collect all next year too.

 

The bears do have the big Mo now, so they will get away with alot.  

 

It`s like those of you that play the board game of Monopoly.  There gets to be a point in the game when everybody has houses and hotels on the properties.  The best thing that can happen is that you get sent "directly to jail" and you sit there for 3 turns when you are safe in jail from landing on anyone`s property. 

 

And that is where we are in the grain market, it`s probably too late to do anything now as far as selling, just put yourself in "jail" for 3 turns and wait it out.   Smiley Happy

Senior Contributor

Re: The Rawleigh man and Marketing

Probably tooting my own horn here, but I like the way I do business. Contracts with growers at least 6 months in advance of harvest and all pricing, quality parameters and fob points are known up front. Most of the time you even k or the end buyer. Some of my growers have gotten so comfortable they don't bother to sign and return the contract...and the contracts are still honored. It's also just plain fun to grow different things each year.
0 Kudos
Honored Advisor

Re: The Rawleigh man and Marketing

BA your basis contract is one of those tools I use.  It fits our traditionally hegher basis location, and it fits storage.  We have end users we want to use and we can extend the delivery point out months after harvest to get more months of pricing options.  But that is just us and our crop.   Every farm has different options, cash flow needs,  and different buyers.

You just cannot follow someones advice until it fits your circumstances  ------ but I guess most of us know that.

 

Hobby The biggest danger IMO is the "promotion" asks a producer to measure his education in marketing by dollars spent.  There is no corellation.  The best advice I have ever received was from a well experienced neighbor (a friend of my fathers) who took the time to explain his choices and comment on mine when asked.  BUTTTT your right.  In a small business the most dangerous thing you can do is delegate responsibility to someone who has nothing at risk.

And It is controversial,,,,,,  I hate to point it out, but marketing and handling weather risk are two of those things that might tell us we are in the wrong carreer or at least should take our business on a different path.   Marketing is making wise decisions as often as you can, but success in marketing is handling the times you don't.  I don't want to catch myself blaming someone else.

0 Kudos
Honored Advisor

Re: The Rawleigh man and Marketing

Hey SW, here`s a primer of basis contracts and their advantages and a couple things to be aware of.   If you`ve used them and that meets your marketing schedule and you see a attractive basis then go for it.  A buyer that wants a freeflow of corn will know he`ll have a supply coming.

 

http://www.ursacoop.com/index.cfm?show=10&mid=49&pid=1 

 

Here`s snippet about sub $3 corn from the Soybean Digest.

 

http://cornandsoybeandigest.com/corn/will-corn-prices-break-3 

 

 

 

I guess if a bear scares you into selling for $3.30 and the price goes to $2.75, then that bear has inadvertently done you a favor  Smiley Happy

0 Kudos
Honored Advisor

Re: The Rawleigh man and Marketing

Thanks BA,

 

My comments on Basis contracts has nothing to do with time, and definitely not this time or now.  It would be in an up market time frame,  say like traditional october to march for corn.

 

Textbook way to tripple the anxiety, price corn for 2015 at 3.9,  then watch the market go to $2.90 with a cost of production at $4.50.

 

The only thing to be worrying about is what we are going to plant.  And in our area finding enough cattle to graze it.  

 

2015 is setting up to be a the year the fringe acres see other options.

0 Kudos
Honored Advisor

Re: The Rawleigh man and Marketing

For the young guys and especially, the back to the farm guys ------- I find that when I get away from the murky waters stirred by those who scavenger off our marketing struggles,  things get clearer to understand.  There are cituations that benefit both the producer and the buyer.  Find them-----

BA and hobby (and others) don't spell it out very well because we are all slow to give out details, but marketing starts with getting yourself in a financial position to supply the best market you have.  And that doesn't equate to big.  A friend like Shaggy who works off farm and has limited debt is probably in one of the strongest marketing positions possible.  Whether he has storage or rents it, he has a very wide marketing window to work with and very little pressure to sell, in fact a tax incentive not to that will pay the storage bill.

I hear some criticism of those who hold grain for multi years.  I have audited accounts, reviewed elevator storage data, and provided accounting assistance for folks in those positions ------ You just don't find folks in financial trouble doing that.  Watch and ask what long time and respected businessmen do and go beyond that -----ask why?  My best marketing mentor was a guy locally with two deaf sons.  Locals will know him by that.  The wisest financial advisers ever, hidden on a farm with a gift of seeing through murky.  He told me every marketing decision could have been better. " I intend to figure out a way to improve it within a month or two".  "If I can't my brain is not working" ------His way of saying "more than one way to skin a cat, learn the options for next time".   First advise he gave me --- "know your local basis trends and what delivery ability post harvest does to them".  He knew the area.

40 years later I listened to a retired exec. for fc stone ask my son after a "fast internship" with him(they are cousins) -- "Have you got your basis charts done yet."  -----------

 

It is your responsibility to manage that risk ---enjoy it.

 

My dad's first marketing move was in the same time frame as the Rawleigh man.  He farmed limited acres, worked in town nights, and did custom harvesting to support his farming habit.

He and a friend(Mr. Buller) went together and bought a couple of "batch" grain dryers and dried grain for themselves and others. Then dad followed that with a couple of 5K used grain bins.  The harvest market and drying charges for milo were to be avoided if possible.

We owned a truck which was legal on more roads than the one to the closest elevator.

 

Point to be made:   Learn every day, buy information, but do not pay someone else to take away the risk or responsibility.  I have neighbors who will not hire anyone to wash their car,  but will hire someone else to plant and harvest.  go figure

 

It is your risk, you can't avoid it--- it is like swimming, you'll never get over the fear until you get wet.   Embrase it, cherish it, don't buy more, work with it, get used to it.  attempting to pass it on will increase it, noone will manage it better than you.  Make a mistake, one that hurts a little,  figure out how you'll survive.  (and you'll forgive yourself ______ if you won't, you won't forgive yourself for hiring that other guy either.)  Your making yourself a better manager in the future.

Hobby is right---- it is one of the most important responsibilities you have.  Even more so when the margin is tight.

 

0 Kudos