Successful Grain Marketing Focuses on Establishing a Financially Successful Farm Price
Commodity prices are established in an open auction format at well-established exchanges such as the CME Group. Prices are based on the information, goals and objectives of active buyers and sellers. Being an open auction, anyone with an interest in trading the commodity can enter and leave as they wish. Farmers only receive a currently traded price when they sell.
While high levels of price volatility in a rising market enhance the emotion associated with the grain marketing decision, price volatility also brings opportunity. Taking advantage of the opportunity requires discipline in the marketing decision. This Center for Agricultural Profitability article highlights the role of expected revenue in relation to production costs in making the grain marketing decision as well as the creation and importance of your farm’s average selling price.