Change Text Size: A A A

Baseball & Marketing

By Michael Oleson

Corn and soybean prices along with farmland price values are following the same upward trajectory in regards to the current trend. It begs an interesting question: What does this really mean? Typically, many growers will see the positive price improvement and hold out for even higher prices for the next day, then the day after that, and then the week after that. While some farmers are rewarded by the rally when they make sales, human nature tempts us to wait and try to sell at the peak of the market and hit a home run . Generally speaking, there’s a reason behind the rally, and sometimes it is difficult to know why the market moves like it does. This makes marketing a challenge, especially when as humans we want to “hit the home run” by selling at the highest price to maximize profit. 

Given that farmers are watching the upward trend in their commodity market, landowners are likely doing the same as they watch the value of their asset increase. Just like the grain markets, land values are following the same positive trajectory. Both land and grain values are at their highest levels since 2012. Farmland values and sales (or lack thereof) could be entering an interesting crossroads. At the moment, there are very few acres in the market to be sold. Will this translate to a similar mindset like farmers who hold their bushels close and hope to sell at the peak? Time will tell. It certainly feels like these two markets are following one another hand in hand not only by increasing in value, but also how the people owning bushels and acres appear to not be selling into the rally. 

A grain merchandiser one told me a wise saying when it comes to marketing: “Remember, you never go broke making a profit. Make your sale and move on, and never look back because it is impossible to hit a home run all the time. Base hits, doubles, and triples are how you win this game.” If we apply the same logic from grain marketing to farmland opportunities, one needs to be mindful of their overall vision for the future. About 25 years ago, land sold at $3,000 or so an acre seemed expensive. Looking in the rear view mirror today (which I never recommend) would prove that value proved to be a bargain. Will we someday look back and think the values today are a bargain? Only time will tell, because grain commodities and land values tend to operate in a cycle. For the current or prospective landowner, today’s pricing could be a selling or a buying opportunity. 

At the end of the day, each person (farmer and landowner) needs to determine what their vision and goals are moving forward while swinging to hit the singles, doubles, and triples. Swinging for the fence leads to many strikeouts. It is the non-strike out hits that make a person a winner in the game of baseball and marketing success.