Corn And Soybean Marketing Strategy Evaluation For Southwest Indiana Farms

James Mintert, Michael Langemeier and Grant Allyn

No 398717, 24th Congress, Saskatoon, Canada, 2024 from International Farm Management Association

Abstract: Various corn and soybean marketing strategies’ historical performance were examined from the 2004/2005 to 2022/2023 crop years. Strategies included combinations of pre-harvest sales, harvest sales, and sales from on-farm storage later in the marketing year. Strategy evaluation explicitly included on-farm storage costs based upon financial records from a commercial scale southwest Indiana farm in addition to the opportunity costs of storing corn and soybeans post-harvest. Cash prices from southwest Indiana markets near the Ohio River were used to generate historical returns. Results indicate that storing corn and soybeans after harvest generated, on average, higher corn and soybean returns compared to grain sold at harvest. Strategies that included pre-harvest sales made in May using hedges placed in December CBT corn futures for corn and November CBT soybean futures for soybeans also provided higher average net returns than strategies that relied solely upon harvest and post-harvest sales. Combining pre-harvest sales of corn and soybeans made using futures market hedges with unhedged storage following harvest generated the highest net returns, on average, for both corn and soybeans. Results provide evidence that producers should include pre-harvest spring sales and sales from on-farm storage following harvest as part of their crop marketing strategies.

Keywords: Farm Management; Marketing (search for similar items in EconPapers)
Pages: 19
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifma24:398717

DOI: 10.22004/ag.econ.398717

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