When developing a grain marketing plan, it is easy to become overwhelmed by the numerous combinations of price targets, possible sale dates, and contracts available. One of the easiest ways to simplify one’s marketing plan is to develop a date-driven plan. To create one, simply divide your un-priced grain into smaller units and select a specific day each month to sell to the local elevator at that day’s cash price. The question is: Will this date-driven plan improve the average price you receive per bushel?

This article will evaluate various date-driven winter wheat marketing strategies for Kimball, Nebraska. The data in this article is from the USDA Marketing Service and was collected each week on Thursday from 1997 to 2017.

Six separate date-driven marketing strategies for winter wheat are summarized in Table 1. These strategies are compared to each year’s average harvest price over the 20-year period and the probability of the average price of a strategy being higher than the cash price at harvest.

Although most people consider prices lowest at harvest, this is not always the case for winter wheat. The Harvest Price column shows outcomes of selling 100% of winter wheat across the scale the first Thursday of July for each year. Ten out of the 20 years selling at harvest resulted in a higher average price than any of the date-driven strategies shown in Table 1.

The remaining strategies divided unpriced bushels into equal amounts and sold them the first Thursday of each month listed in the heading. For example, in the two-month July-August strategy 50% of the bushels were sold the first Thursday in July and the remaining 50% were sold on the first Thursday in August.

All of these strategies resulted in a lower average price over 20 years than if all of the bushels had been sold at harvest each year. The greater the number of months across which winter wheat was marketed, the lower the probability that the date-driven strategy would outperform the harvest price.

The cost of storage was not included in this analysis as storage costs vary greatly among farms, depending on the size, age, and condition of the bin and the individual farmer’s operating note interest expense. However, if an individual estimated their storage cost per bushel per month for each marketing year and included it in the analysis, it would show even lower average returns for plans where winter wheat was stored for several months, maybe even eliminating the gain in revenue over the harvest price.

Additional marketing strategies were evaluated, and those that had an average price higher than the 20-year period are shown in Table 2. Albeit on average these strategies have a higher price, they have a lower probability of obtaining a price higher than what was available at harvest. Furthermore, these strategies occur later in the marketing year making storage costs a large consideration when employing one of these date-driven strategies.

This article illustrates that selling unpriced winter wheat at harvest, rather than using cash bids to market winter wheat later in the year would result in a higher price on average over multiple years. This is not to say that selling at harvest is the best marketing plan for winter wheat. A farmer must assess their personal risk and determine what combination of price targets, possible sale dates, and marketing contracts work best for their operation. Past performance is not necessarily indicative of future results. Grain marketing involves risk, and you should fully understand those risks before pricing grain.