OBERLIN, Ohio — He may not get you the top prices for the year, but a Chicago-based ag marketer and experienced commodities trader promises to do what he can to get you in the top third.
Mark Gold, president of Top Third Ag Marketing, spent the evening of Jan. 30 giving farmers advice on how to become better marketers — even if it means a modest improvement.
Gold has 20 years of experience with the Chicago Board of Trade, where he was a pit trader and floor broker. He’s worked for various exchanges, including the popular Chicago Mercantile Exchange.
A trend he sees, and that he says statistics support, is most farmers tend to market their crops in the “lower third” of available prices for any given year. Gold’s mission is to reverse that trend, and get farmers in the top third.
Rules to follow
He gave a 10-step approach to becoming a better marketer:
One. Spend more time on marketing, at least five minutes a day. And, understand your limits and when it’s time to seek a professional.
“Farmers are the best in the world at raising crops and livestock,” he said. But at the same time, traders are the best at making good trades.
He said the chance of a non-market professional beating professional ag traders is about seven percent — a high stakes risk.
Two and three. Quit making excuses and take emotions out of your market decisions.
Four. Be willing to sell cash grain. Gold said it was common advice over the last 150 years to not make any sales until the grain is in the bin, but with the many revenue insurance options, farmers can protect themselves and market sooner.
“Some of the best marketing opportunities you’ll have in any given year come well before you harvest the crop, sometimes before you even plant it,” he said.
If that’s not enough reason, he also turned to Biblical scripture from Proverbs: “People curse the man who hoards grain, but blessing crowns him who is willing to sell.”
Gold said the Bible has some profound insight for farmers, even in our modern era of agriculture.
“What’s in the Good Book is as valuable and important to our lives as when it was written thousands of years ago,” he said.
Five. Develop and follow a marketing plan. “If you’re going to do a better job of marketing, you have to have some type of plan,” he said.
Six. Use market safety options like puts and calls. A “put” basically is an insurance policy in case prices go down, and a “call” is insurance in case prices go up.
Seven. Practice self-discipline and safe marketing.
Eight and nine: Track your basis and don’t lift your hedges until you sell.
Ten: Find a marketing mentor who you can trust, and who tells you what he “knows,” not just what he “thinks.”
The event was sponsored by Ag Credit. A steak dinner preceded the presentation and farmers had time to ask Gold their questions.
Jeff Hoepf, vice president of Ag Credit, said it was an excellent talk on risk management and “protecting your investment.
Julia Nolan Woodruff, account officer with Ag Credit, said Gold offered good advice on developing a marketing plan and having the discipline to stick with it.
“So many times farmers are looking for the top and they end up in the bottom,” she said.
Jim Woodrum, who farms near Oberlin, said he’s partnered with Gold for four years. He receives advice and emails from Gold, but the decisions are still up to the farmer to make.
“He’s a pretty straight shooter,” Woodrum said.