November 24, 2020

Grain Marketing Simplified: Firm Offers Pay Off for Clients

Know how frustrating it is to miss a profitable grain price when you don’t put in an offer ahead of time? Tony Girres knows that feeling. It’s why he started using firm offers with MaxYield Cooperative.

“I can only store a portion of my crops and don’t want to think about grain marketing all the time,” said Girres, who farms near West Bend. “I’ve used firm offers for a number of years and like the system.”

Girres determines his cost of production and makes a plan to sell ahead. He can put in a firm offer on any price, and MaxYield’s computerized system will keep an eye on the offer 24/7.

“About half of my offers hit in the overnight trade. If I didn’t have the firm offer, I’d miss this opportunity.”

Worry less about grain marketing
MaxYield’s firm offer system is a great way to gain a marketing edge, said Harry Bormann, MaxYield’s grain team leader. About 69% of MaxYield’s fall 2015 corn purchases and 58% of MaxYield clients’ fall 2015 soybean sales came from firm offers.

“With firm offers, clients often got a price that was $1 to $1.50 per bushel higher than harvest-time sales in 2014,” Bormann said. “Corn was consistently 50 cents to 75 cents better for pre-harvest sales than harvest-time sales.”

Many firm offers are triggered in the overnight trade, just as Girres has experienced. “If the market starts to move higher, traders go where the offers are,” said Bormann, who noted that the overnight trade is tough for individual clients to track. “Traders have to seek out whatever is available to buy, and that includes grain from firm offers.”

While a growing number of MaxYield’s most progressive clients use firm offers, some clients have one big question on their mind. What if you take my offer and the market goes higher?

“Let’s hope it does,” Bormann said. “When your first offer gets taken, put in another offer at a higher price.”

This works for Girres, who sells his grain in increments. Throughout the year, he puts in offers at levels above his breakeven. Then he doesn’t have to worry about hitting the “right” time to market his grain.

It’s a smart strategy, Bormann said. “Don’t try to market your whole crop at one price. We recommend selling your grain in increments of 10% to 15% and using firm offers to market the number of bushels you’re comfortable with.”

Get started today
Firm offers are available on corn and soybeans, and there’s no charge to place one. Team members at any MaxYield location can help you get started with firm offers.

“The process is simple,” Bormann said. “Don’t let that grain you’ve put in the bins this fall sit there without a price goal.”

Keep using firm offers throughout the year to maximize your profit potential. “The best thing you can do is start putting in offers for the 2016 crop, which gives you a whole year to market,” said Bormann, who added that it’s not too early to look at marketing some 2017 grain. “When you’re planting corn next spring, sell some corn, too.”

Girres plans to continue using firm offers in the months ahead. “The firm offer system makes it easier to sell ahead and stick to a marketing plan. It works for me.” n

Firm Offers Aren’t Just for Grain
Because the firm offer system works so well on grain, MaxYield’s energy division also offers a firm offer where clients can specify the price they want to pay for fuel. For more information, contact MaxYield’s energy solutions specialists, including Mark Collins (641-425-5184) and Doug Shirk (515-320-5629), or call Energy Central at 515-887-7282.

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