A good marketing plan tries to address a simple question: At what price am I willing to sell? The marketing plans I write answer this question by featuring price objectives (including a minimum price objective that is consistent with local production costs) and decision dates (see my Web site at www.cffm.umn.edu/GrainMarketing/MarketingPlans.aspx).

Price objectives are easy enough to understand, but in my last column I suggested that a marketing plan based on price objectives alone is flawed. Decision dates will complete your plan. What are decision dates, and how can they transform your marketing plan into a real plan for action?

Let's start by reviewing why price objectives alone cannot form the basis of a complete marketing plan. First, there's the problem of setting unrealistically high price objectives.

I recall a conversation I had with a soybean producer in 2004 (the last time soybean prices climbed over the $10 mark). The market sported a strong uptrend and great volatility. This particular producer was firm in his conviction to hold soybeans in storage until the price reached $20/bu. In this case, his plan for action became a plan for no action, due to his trust in an unrealistically high price target. If he's still in business, he has a tax problem to go with a high storage bill.

Price objectives pose a different problem for producers waiting for the top of the market. Their thinking might go like this: “Did you say that corn prices were $1 higher since harvest? I'm waiting for another 25¢, and then I'll make a sale.”

On the other hand, it could sound like this: “Ouch. The market was down 50¢ last week. I'll make a sale just as soon as the market gives me those 50¢ back.” Waiting for the top becomes a never-ending game of procrastination. In the words of Mark Twain, “Never put off until tomorrow what you can do the day after tomorrow.”

Decision dates are important to a marketing plan because they offer a solution for our natural desire to put off important decisions.

A decision date is a date to make a sale even if your price target is not reached, as long as the price is above your minimum price objective. Decision dates are a call for action based on time, not price, and they transform a marketing plan into a real plan for action.


Let's look at an example of how a decision date could have transformed a producer's $20 price objective into a plan for action.

An action plan could be written this way: “Sell soybeans for $20/bu., or by the last day in June, whichever comes first.” In this case, the simple addition of a decision date would have helped our friend sell $9.50 soybeans and avoid the $4.50-6.00 prices that persisted through much of the next two years.

Now that you understand how decision dates work, the accompanying charts explain why I like to scatter my decision dates in the months of March, April and May. A good picture, they say, is wortha thousand words.

Do you have some old-crop corn or soybeans in storage? Are you waiting for $6 corn or $15 soybeans in your postharvest marketing plan?

I won't tell you it can't happen, but you might want to incorporate decision dates into your thinking just so you won't forget to get something done while prices are good.
