NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665

December 30, 1998

The Market Advisor: Wheat Marketing Plan for `99

George Flaskerud, Extension Crops Economist
NDSU Extension Service

Take time to develop a marketing plan for each crop that will be produced in 1999. Doing so could mean the difference between profit and loss for the farm. It could even mean the difference between survival and bankruptcy. Developing a marketing plan is probably the single most important management activity on the farm. A marketing plan for each crop is essential to overall farm financial planning.

In financial planning it is necessary to combine crop production costs (economic and cash) and government farm program payments with a marketing plan. This permits costs and returns to be estimated for the farm. Then it can be determined if the farm's cash will flow and if production will be profitable. If cash flow or profit problems appear, costs may need to be reduced or alternative enterprises considered.

It is best to keep the marketing plan for a crop fairly simple. That way it can be committed to memory and you will be more likely to act on it when key elements are triggered. Key elements include price objectives and time deadlines.

Price objectives are matched with time deadlines. About five objectives and corresponding deadlines are usually specified in a marketing plan. A percentage of the crop is sold when either the first price objective or time deadline is reached, another percentage of the crop is sold when either the second price objective or second time deadline is reached, and so on. The largest percentage is sold in the middle of the price range.

Source: George Flaskerud (701) 231-7377

Editor: Dean Hulse (701) 231-6136

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