Talking market strategy in Ashtabula County

Nothing in the commodity market has been any less predictable than grain prices over the last three years, according to Tim Gildersleeve, who grows about 1,200 acres of grain and forage on his Austinburg farm.

“It’s no secret grain and commodities have been on a roller coaster,” Gildersleeve said Sept. 25 during the Fall Beef Twilight Tour in Ashtabula County. “I thought I might understand the market — for a while.”

His comments about the grain business were preceded by a tour of his family-run operation. Some of the grain and haylage Gildersleeve harvests goes to fatten a herd of mixed Angus steers and heifers. Gildersleeve said when he sold out of the dairy business in 2001 because he couldn’t get good help, he swore off cows.

However, when the 7 acres of rough pasture along the creek grew up in weeds, he decided to buy a few calves to keep it chewed down. Today, he direct-markets beef to a select clientele, keeping an inventory of about 40 head.

Cattle

On the tour, he showed the crowd a 20-by-50 foot stall occupied by 15 newly-bought calves. Several dozen older steers were grazing in the pasture (with four riding horses) and two full-grown steers were in a run-in shed ready for their trip to market.

The first year he raised beef he sent some to the auction and some went directly to customers’ freezers.
“The freezer beef paid better than the auction did,” he said. “Right now it’s working for me. The beef keeps me busy in the winter.”

As of Sept. 25, Gildersleeve said he is getting $2.65 a pound for hanging weight, which includes bone and fat.

Gildersleeve has his operation set up so the beef raising takes a minimal amount of time and effort. That’s a necessity since spring through fall he is planting, ten

ding and harvesting hay and grain.
The life agrees with him. “I don’t have a job,” he said. “I have a hobby that pays a little bit.”

Market talk

From a buyer’s point of view the scenery isn’t much different this year.

“If someone tells you he can predict the market, he’s lying,” said Kelly Hyde, feed and grain division manager of Western Reserve Farm Cooperative in Jefferson and Middlefield. But there is at least on fact in agriculture: When the value of the U.S. dollar drops, the demand for American grain goes up and exports get stronger, Hyde said.

Conversely, when the dollar goes up, U.S. exports suffer.

“Commodities have been strong because the economy has been weak,” he said.

Once the country’s financial situation improves, grain prices will level off or even dip.

“It used to be that supply and demand affected grain prices,” he said. Now the strength of the dollar outweighs the old standard and that is determined in part by the global market — what’s going on in South America, India and the Middle East.

“If no one can predict the grain market, what are we supposed to do?” Hyde asked, then answered: “Understand your market a little bit.”

Keep track of what the Chicago market is offering for your grain, then compare it to the real market: prices at the ethanol plant, the barge terminal and the railroad terminal. Figure out what it will cost to get the beans there.

“Farmers can haul to the terminal, too,” Hyde said. All grain doesn’t have to go through the elevator to get sold, but if a farmer doesn’t have enough to fill a semi-trailer, the elevator may be the best answer.

“You’re not going to haul a wagon to East Liverpool and make money,” Hyde said.

If trucking to a terminal is an option, make sure the moisture content of the grain is within acceptable limits. A load of corn or soybeans that is too wet can be rejected.

“The best way (to check moisture content) is to take it right out of the combine, put it in a Tupperware container and run it right to the elevator,” Hyde said. The elevator should have a tester that is certified to be accurate.

Hard to know

With grain prices changing daily, it is hard to know when to sell, he said. Success depends on keeping careful records of planting, population and yield checks every year.

“Then you can come up with a plan,” Hyde said. If you know the average yield of a particular field, you can contract part of it when you plant. Once the plants are up and you know your population, you can contract some more. He recommended contracting 40 percent to 60 percent of anticipated yield, leaving the rest uncontracted.

Marketing grain is still a gamble, Hyde admitted. Western Reserve is sitting on wheat from last year that they can’t unload because there is no market for it.

“This year the country is full of wheat — we can’t get a bid,” he said.

He summed up his advice with a disclaimer. “I wish I could give you an exact prediction on what to do with your grain,” Hyde said. “I think (the market) is going to be up … and down.”

About the Author

Farm and Dairy contributing writer Ann Wishart lives in Newbury, Ohio. A graduate of Youngstown State University with a long career in the newspaper industry, she is also an accomplished equestrienne. More Stories by Ann Wishart

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