Marketing Your Grain Into 2025
Grain markets for 2024 have been a volatile ride for many western Canadian producers. Tariff threats, tariff exemptions, rail strikes, port strikes, political shifts, biofuel policies, export markets, global production issues: this is not an extensive list. Markets are volatile and proper grain marketing can be the difference between unloading grain out of fear or taking a calm, risk managed approach to the markets and your crop marketing plan.
Below are a few helpful tricks to keep the hair remaining on your head intact for years to come.
Grain Marketing Tips Heading Into 2025
• Cash is King: Know what your cash flow requirements are: Find a template on excel or even write it out on a notepad at the bare minimum. When do you need cash and how much? Many producers need to create significant cash February and March timeframe to pay inputs off for spring time. Don’t wait until you need cash to start making cash. Market your grain when you can and not when you have to. Waiting and hoping prices rise when you need cash in a month works the odd time, but most times it is a losing proposition. Know your commitments a year to 6 months out and have a plan in place. We like to see producers have ample cash reserves to buy themselves the time required to act upon marketing plans. A forced sale due to cash reasons should never occur in a properly crafted marketing plan.
• What Are My Returns? Know your Costs of Production: What is a good price? A Breakeven price? How much return are you actually generating at said price? In commodities, the seller of the cheapest bushel tends to be the market maker for the day. A commodity is a commodity and grain producers who produce the cheapest bushel of crop tend to win in the long run. Know your costs and set reasonable return on investment goals to help craft your marketing plan.
• Logistics and Crop Movement: When marketing your grain, logistics of the sale is often overlooked. A $5 per tonne better basis in April might seem like a ‘win’ for the day but you will be facing other challenges: Road weight restrictions, spring busy season, soft yards, lack of capacity to move the required quantity of tonnage, spoilage risks, ect. Crop marketing needs to consider the logistical moves behind a sale, moving a few loads each month to be able to keep an eye on the quality of your inventory is a strategy within itself.
• Marketing Horizon and Outlook for Crops: What crops do we want to hold onto, what crops do we want to kick out the door? This is where the market outlooks and forecasts come into play. Is there a political risk on the crop you worked hard to grow? What does the current supply of the crop look like locally and globally? Is there enough demand to give each tonne a home? This is where one needs to build a relationship with a trusted advisor who can help outline what these risks or opportunities might be.
• Properly Manage Risk. Advanced Marketing Tools: There are many tools available to producers that do not result in a direct cash sale. One needs to be cognizant of what goals they are trying to achieve with each sale although. Producers can simply elect to sell the cash price or place targets but there are other tools as well. Basis contracts, Futures contracts, minimum price contracts, daily averaging contracts, the list goes on. Producers can also work with licensed futures brokers to enact a hedge strategy on certain futures traded grains.
• Don’t Forget About Opportunity Costs: Cash advances available through the Advance Payments Program CCGA are a great tool if used properly. Producers may be able to access up to $250,000 interest free operating capital and up to $1,000,000 of total advance cash at Prime minus 0.25% for the current program year. Prime rate has been falling since summer of 2024, helping ease some of the borrowing costs. When it comes to opportunity costs, one needs to understand there is a cost to storing grain and the opportunity cost grows when there is operating notes to be repaid. Your grain marketing advisor will be able to illustrate what the opportunity cost will be to you.
Exceed Grain Marketing
Simply put, we help producers market their grain. Exceed Grain Marketing works with producers all across the Canadian prairie provinces to better understand the forces at play in the markets and how we can best manage the risk at hand. Our experienced and diversified team members work directly with producers like yourself.
We have a very talented Alberta team and if you have any inquiries about the services they provide, reach out to them.
Shaylin Erickson – Viking AB – 587 256 4952
Janelle Pickard – Provost AB – 780 753 8729
Dennis Kowalchuk – Edmonton AB – 587 594 9621
The above listed advisors are key assets on the Exceed Grain Marketing team and they work hard for the producers across Alberta to help market their grain. Another way to reach us to find the proper advisor for your region is to visit our website or reach out directly to Exceed at [email protected] or myself at [email protected] and I can point you in the right direction.
Ty Kehrig
Vice President – Exceed Grain Marketing
