All posts by Deon Graupner

27 Oct 2021

A new farmers’ app to help crop farmers better manage their crop prices (applies to the SAFEX maize price, wheat prices, CBOT corn prices and more.)

Introduction to crop farmers’ new sidekick

Traditionally, putting together an extremely well-informed crop marketing plan has been a challenge for crop farmers. It involves a lot of paperwork and decisions that derive from various sources and which need to be compiled manually and constantly evaluated in relation to live market prices.

Now, everything has changed. You as a crop farmer now have a mobile platform to simplify the creation and continuous fulfilment of your crop marketing plans.

Let’s uncover more about how CropsProfit does this

How does CropsProfit work to keep you in tune with the SAFEX maize price; wheat prices, CBOT corn prices? 

CropsProfit was designed to feel like the apps we use every day, so it understands that no two farms are the same, enabling you to create truly personalised crop marketing plans. You can organise and store information inside a dynamic interface that translates your input into actionable insights that are well informed by live crop prices.

CropsProfit takes each of your season’s unique crop data you input and transforms it into a visually represented overview of your current business situation. Aside from all the built-in calculations, algorithms and graphs CropsProfit automates for you, at the very core of CropsProfit is the following idea: “If you’re meeting your profit goal today, why not sell some of your crop?”

 

The philosophy of selling some of your crop when your profit goals are met.

The two consecutive seasons below were characterised by extreme price volatility which nobody was able to predict, yet CropsProfit navigated them both profitably. A practical illustration of the reliability of this philosophy.
 

For a more detailed look at the study, you can go to the Proven Results page on the website.

                             

(Orange dots are where our options were bought, and the red dots are where forward fixed-price contracts were concluded.)

The proven CropsProfit advantage to keep abreast with the SAFEX maize price; wheat prices, CBOT corn prices and more.

We decided to put our simulation technology to the test by examining the average net profit per hectare of ten anonymous farmers for each of the crops (white maize, sunflower and soybeans) over three seasons. The farmer’s data was sourced from a reputable company that operates a bureau service for commercial crop farmers for more than 20 years.

We then loaded the average break-even costs of the ten farmers for each of the crops (white maize, sunflower and soybeans), their planned harvest yields and their final harvest yields and loaded it into CropsProfit to calculate its simulated net profit per hectare.

The same profit goals above break-even cost were set for all three crops and all three seasons. The lowest profit goals were set at 20% and 1% of each crop’s total harvest was sold per week. The ideal profit goals were set at 30% and 5% of each crop’s total harvest was sold per week. Provision was also made for transaction fees and storage costs.

Result: CropsProfit’s simulated average net profit per hectare for all three crops over three seasons was consistent and 45% higher than that of the anonymous control groups.

Would you like to know more?

Download the eBook and unlock the app by using the button below:

 

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13 Oct 2021

SAFEX maize price not on your side today? New crop farmer app helps you harness it when it matters most

As the market price changes over the season, nobody can predict when the profitable time to sell will be. But you now have a new tool that allows you to take better advantage and change the tide.

Know when the market is offering a profit

CropsProfit works by combining live market prices with a familiar feeling mobile platform that hosts and visualises your farm’s key information for each of your crop marketing plans.

 

During every crop’s marketing season, there is a profitable time; the problem is that nobody really knows when it will be. CropsProfit does not try to predict the SAFEX maize price or any of the crop prices for that matter.

 

You choose the amount of money you would like to make when you sell your crop and as the market price changes during the season and you reach your profit goals, the algorithm indicates that you should sell some. The amount you sell will increase as the amount of money you make increases. Experts call this profit margin hedging, which in the end, helps protect the money you make.

 

Try to do smaller transactions at a time for the SAFEX maize price

Position sizing is another word for the size of the transactions you are doing.

 

The larger your transactions (larger position sizing) the more difficult it becomes to make decisions because of its emotional impact and the risk of putting “all your eggs in one basket”.

 

It’s always important to choose a position size for your transactions that you are comfortable with. CropsProfit helps you take the emotion and ‘gambling’ out of the decision and instead follows a proven methodology. In essence, the method, or workings within the platform, is based on the idea that:

 

“If you’re meeting your profit goal today – why not sell some?”

 

For more detail on how it works, download the eBook and unlock the app:

 

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Try to stretch your marketing window when it comes to hedging the SAFEX maize price

The moment you have the intention to produce a specific season’s crop, that season is starting to have a price risk. From a crop producer’s point of view, price risk is the possibility that prices will go down.

 

Therefore a new season’s crop marketing plan can even start when the current season is still growing.

 

When to start a season’s crop marketing plan is a personal choice, but typically it is as soon as the previous season’s harvest is completed.

 

Your marketing window can be stretched even wider by keeping some of a season’s harvest in storage after harvesting. If your profit goals were not reached, CropsProfit will now also keep your storage cost in mind when calculating your net profit.

 

Because everything is tracked and visual, CropsProfit will help you pick up on patterns a lot faster the more you use the platform!

Use all the marketing tools in CropsProfit to keep your finger on the pulse of the SAFEX maize price

Marketing tools are the different instruments you can use to sell your harvest.

 

With your Uncertain Harvest, you are not sure if you can deliver on a contract with a buyer. This is the uncertain time period before and just after seeding and your deliverable harvest is usually 0%.  A typical marketing tool here is a put-option.

 

With your Certain Harvest, you are sure you can deliver on a contract to a buyer. Your deliverable harvest percentage increases as your crop matures, and it reaches 100% after your harvest is completed. A typical marketing tool here is a forward cash contract. There are a few more Certain Harvest marketing tools to choose from while choosing one default marketing tool at a time.

 

With the right tools at your fingertips, you will be able to take advantage of more opportunities the market has to offer. You’ll become more and more empowered to not only keep your finger on the pulse of the SAFEX maize price but also take more profitable steps forward on a continuous basis and into the long term!

The simulation feature demonstrates the impact of your season’s settings for the SAFEX maize price, CBOT corn price, wheat price and soya bean price fluctuations

CropsProfit allows you to use dynamic season types like Actual and Simulation to compare your crop marketing plans. Essentially these features allow you to compare your actual transaction’s performance to the simulation transaction’s performance when obediently listening to the recommendations CropsProfit’s simulation function makes.

Conclusion

With CropsProfit, the principles discussed are built into your crop marketing plans, making the odds much better for the SAFEX maize price to end up on your side.

Would you like to know more?

For more detail on how it works, download the eBook and unlock the app:

 

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29 Sep 2021

Crop farmers App revolutionises profitability gain (in relation to SAFEX Maize Price, CBOT Corn Price, Wheat Price and more)

“Everyone knows there is an ideal time to sell, but nobody knows when it will be.”

With the CropsProfit platform, you as a crop farmer get a personal marketing sidekick in your pocket. You’ll be able to plan your season for success and manage transactions in relation to live market price changes for greater long term success.

Why does CropsProfit perform so well in relation to SAFEX/CBOT/Wheat price fluctuations?

Set your own profit goals

When selling their products, almost all businesses outside of farming operate with a profit goal in mind, and there are good reasons for it.

Crop farmers are inherently price takers, which means the prevailing prices in the market must be accepted. This has led to the mistaken belief that crop farmers are not in control of their pricing.

With CropsProfit, we decided to help crop farmers with an easy way to set their own profit goals and simplify the typically complex, paperwork-heavy and often unproductively emotional marketing process.

If your crop farm is at least as productive as the average crop farm producing the same crop, and your profit goals are set realistically – there will be a time where your crop marketing plan will be able to make a profit.

In summary, a major reason CropsProfit works so well is that profit goals are at the core of the marketing plans the platform helps you create.

Bigger marketing window.

Because nobody can accurately predict when that profitable time will be, it is important to be in the market for as long as possible and to do transactions when you reach your profit goals.

For all the insights compiled visually, download the eBook and unlock the app’s free trial by clicking on the banner below:

 

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Profit margin hedging made easy (relates to SAFEX maize price; CBOT corn price; wheat price and more)

Profit-margin hedging is the simultaneous hedging of inputs and outputs of a production process. [1, p.379]

Using profit-margin hedging at its core, CropsProfit has a unique approach to crop pricing.

Regardless of whether you’re dealing with the SAFEX maize price, CBOT corn price, or wheat price, CropsProfit calculates a net profit at the live market price by taking all the costs and other variables for a season into account. This data is then compared to your Profit Goals. From there, CropsProfit’s simulation suggests a transaction when your profit goals are reached!

From now on, when you look at a crop’s market, you’ll really know what is going on and how it relates to your farm’s unique situation.

How CropsProfit performed in a long term case study

To put CropsProfit’s simulation technology to the test, in a long-term case study, a farmer’s real data was captured and CropsProfit simulated their marketing and calculated the average net profit per hectare of White Maize over 7 seasons. All this is also in relation to the lowest profit goal, which is 20% per hectare above each season’s total break-even cost.

For the 7 consecutive seasons, CropsProfit caught the curveballs over the difficult time, scoring 21% more profit on average – meaning the profit goal of 20% was surpassed and 41% was achieved. For a more detailed look at the study, you can go to the Proven Results page on the website.

Conclusion

Regardless of whether you’re looking at the SAFEX maize price, CBOT corn price, or wheat price, by using cutting edge technology that simplifies your process while focusing on the pursuit of a specific goal, you are more likely to achieve it.

Much like the well known adage – “Aim for the moon. If you miss, you may hit a star.”

Would you like to know more?

Download the eBook and unlock the app by clicking on the box below:

 

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Reference

1.Kee, D., & Kenyon, D. E. (1999). Hog Profit Margin Hedging: A Long-Term Out-of-Sample Evaluation, Paper presented at NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management, Chicago, IL. Retrieved from http://www.farmdoc.uiuc.edu/nccc134

15 Sep 2021

How to establish yourself as a reputable crop portfolio manager

As a trader or other professional in the crop marketing value chain, you can now distinguish yourself in a new role as a trusted CropsProfit portfolio manager for farmers.

Create teams with each of your clients. As a member of each team, you can now manage your own portfolio of clients. Use each team’s free 30-day trial to help them get started.

As you earn more of your client’s trust, you will be able to execute more transactions which can generate a substantial revenue stream for you.

Now there’s a proven solution called CropsProfit.

What is CropsProfit?

CropsProfit is an easy and reliable mobile cloud platform for personalised crop marketing plans – a safe place where you can create crop marketing plans as a member of each of your farming clients teams.

As the live market prices change for each crop over a crop marketing plan and your teams are able to reach their Profit Goals, CropsProfit’s algorithm indicates transactions for each marketing cycle based on each crop marketing plan’s details.

You can also assist your teams by continuously updating the details on each crop marketing plan, creating more relevant talking points with clients regarding critical crops production variables, profit goals and their relation to market prices.

Profit margin hedging is simplified and you are at the centre of the action as Portfolio Manager. Apply your own expertise and drive better decision-making within each team!

How does CropsProfit apply to you?

Whether you consider yourself a trader, consultant or the newer ‘Portfolio Manager’, CropsProfit gives you the opportunity to foster stronger relationships by enabling you to have much more relevant talking points with your clients in agriculture.

Within the platform, there is a “teams” section, where any team member can add up to 4 other members (free users) to form his/her team. Once you’re all in, you now have a digital home base for all things productive!

Being part of a CropsProfit team and checking in every now and again will give you valuable insight into your client’s crop marketing risk and how it is dealt with. You can meaningfully contribute to how risk is managed and profits are generated!

Establish yourself as a leading, hands-on Portfolio Manager, who’s truly invested in your clients’ well-being and gain all the advantages that come with it.

As you earn more of your client’s trust as their CropsProfit Portfolio Manager you will be able to execute more transactions that can generate a substantial revenue stream for you.

Learn more about CropsProfit by clicking on the banner below:

 

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01 Sep 2021

How are precision farming consultants building more profitable relationships?

You are already lowering your customer’s production risk with your precision farming expertise. Take the next step to help lower their price risk as well.

But what if I told you, there’s a whole new way to add value for your clients, regardless of how busy they keep you in your primary job functions?

 

All too often, farmers prefer to focus on their role as producers much more than the multi-faceted role of being a successful business manager. Precision farming consultants are well-respected among farmers for helping them fulfil their role as a producer,  and are now enabled to use that rapport to add even more value.

Leading precision farming consultants are taking the next step towards increasing their customers’ lifetime value by using the new CropsProfit platform!

What is CropsProfit?

CropsProfit is an easy and reliable mobile cloud platform; a safe place where you and your customers can create crop marketing plans as a team. When the market price changes over the season and you are able to reach your Profit Goals, CropsProfit’s algorithm will indicate transactions that are based on the details of your crop marketing plan.

 

CropsProfit is the digital home for all things productive, allowing team members to input data and increase profitability together!

 

Why CropsProfit could be considered a precision farming technology?

Just like your partnership and precision technologies help farmers make the right production related decisions, CropsProfit helps teams make better crop pricing decisions with your precision data.

 

Create teams with each of your customers. As a member on each team, you can now manage your own portfolio of customers. Use each team’s free 30-day trial to help them get started.

Learn more about CropsProfit by clicking on the banner below:

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18 Aug 2021

How crop farmers can create more crop marketing opportunities

Milton Berle once said “If opportunity doesn’t knock, build a door.”

In this blog, we’re not only going to discuss how to create more marketing opportunities, but we’ll also reveal what kinds of doors have already been built! You’ll even discover how to create and identify more opportunities once you step through the door…

Embrace crop marketing tools for pre-harvest strategies

Effective crop marketing plans begin with a clear vision in mind, understanding the importance of being dynamic and, in reference to ‘the door’ that’s already been built, using new technology.

 

According to research, routine pre-harvest marketing strategies that employ little information requirements might be of significant benefit to grain producers. [1, p.17]

 

The ability to easily employ pre-harvest marketing strategies using uncertain harvest marketing tools like put options creates more profit opportunities. You can now benefit by locking in high prices even before seeding has started, or for that part of the crop marketing plan when you are not certain what your final harvest yield will be.

 

As a platform, CropsProfit makes crop marketing plans more simple and effective. Started by an ambitious crop farmer with over 25 years of experience, CropsProfit is built from the ground up to leverage all the formulas, calculations and graphs that go into a successful crop marketing plan, and make them extremely easy to use.

 

Often put options are neglected based on crop marketing skills uncertainty, but now you have CropsProfit – a tool that simplifies and visualises!

 

Manage 3 time frames at once

Another way to create more marketing opportunities is to harness the ability to manage 3 time frames (crop marketing plans) for every crop type at the same time. You can hedge the next crop marketing plan, which has not yet been seeded, the plan currently growing on the fields and the previous plan, which is in storage!

 

CropsProfit gives you the ability to easily visualise and manage all 3 time frames (crop marketing plans) for all your crops by marking them as favourites for display on your home screen. Once you tap on the CropsProfit logo on your mobile phone you immediately get an overview of your active seasons, keeping your finger on the pulse.

 

Your ability to work in 3 time frames at once will expose you to more profitable price opportunities and will make you less anxious about missing opportunities or the noise (rumours) in the market.

Divide a crop’s season into different profit potential groups

With CropsProfit different profit potential groups can be created for each crop by creating different crop marketing plans for each profit potential groups. (e.g. low and high potential). Now you can set different profit goals for each group, which will trigger hedging transactions at different market prices.

 

Decide on your Profit Goals and CropsProfit will recommend valuable, calculated transactions based on your situation and your appetite for risk.

 

When using CropsProfit for the first time, setting the correct level of my Profit Goals is very important. Setting accurate levels for your profit goals by looking at your historic profits is important, then CropsProfit can meaningfully guide you to improve your profitability.

Use multiple marketing tools

According to research three main maize markets have emerged, namely the cash (spot) and forward contract markets (physical product markets), as well as the derivatives market (futures and options trading) which does not usually involve physical delivery of maize. [2]

 

CropsProfit guides you to use the risk management tools in the three markets at the correct time, creating even more marketing opportunities.

Collaborate

Having specialists like financiers and consultants in your team to help with marketing activities is extremely beneficial. Not to mention how much easier it is for them to add value on CropsProfit. You can give team members access to a clear overview of your certain and uncertain harvest, costs, simulations and more – all in pursuit of the game changing insights they may be able to provide to increase your profitability.

 

As mentioned in other blogs the benefits of collaboration is confirmed by research that groups of size three, four, and five performed better than the best of an equivalent number of individuals. [3]

 

You’ll also have the ability to add family members to your team and make for more productive decisions. Everybody can work together with one single objective – reaching every profit goal.

 

If you’d like to learn more about the platform, download the eBook linked below and unlock the free trial!

 

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Reference list:

  1. Venter, M., M., Strydom, D., B., & Grove, B. (2012). Stochastic Efficiency Analysis of Alternative Basic Grain Marketing Strategies. Submitted as a contributed paper at the A.A.A.E. and A.E.A.S.A. Conference, 01-03 October 2012, Bloemfontein.
  2. Brown, A. N., Ortmann, G. F., & Darroch, M. A. G. (1999). Use of maize marketing alternatives and risk management tools by commercial maize farmers in South Africa. Agrekon: Agricultural Economic Research, Police and Practise in Southern Africa, 38(3), 275-301. doi: 10.1080/03031853.1999.9523555
  3. Laughlin, P. R., Hatch, E. C., Silver, S., & Boh, L. (2006). Groups Perform Better Than the Best Individuals on Letters-to-Numbers Problems: Effects of Group Size, Journal of Personality and Social Psychology, 2006, Vol. 90, No. 4, pp. 644-651. doi: 10.1037/0022-3514.90.4.644

 

04 Aug 2021

The financier’s guide to success with crop farmers

Financing clients in the farming industry is challenging because often they don’t give you the best idea of what’s happening on the ground.

The purpose of this blog is to help you gain continuous business from farmers by making them feel more cared for. It’s now easier than ever!

What is CropsProfit?

CropsProfit is an easy and reliable mobile cloud platform, a safe place to create personalised crop marketing plans. CropsProfit allows for quick and effective crop price risk management planning, whilst interacting with live crop market prices!

 

How Does CropsProfit apply to financiers & consultants?


Within the platform, there is a “teams” section, where you can participate with your crop farming customer in real-time.

As a financier, you’ll be able to see the farmer’s current situation at a glance. From clear visualisations of his season variables for each crop, profit goal, and transactional history – you’ll have key talking points enabling you to add more value and gain valuable insight about the price risk your farmers are exposed to.

Establish yourself as a leading, hands-on financier who’s truly invested in your clients’ well-being and gain all the advantages that come with it.

CropsProfit’s Benefits for Financiers


  • By you facilitating a structured approach to crop marketing, your customer’s debt repayment ability will improve.
  • Being part of a CropsProfit team can give you or your employees valuable insight into your customer’s crop marketing risk and how it is managed. You can contribute meaningfully to the way that risk is managed.
  • You can make a subscription to CropsProfit a prerequisite for approving your customer’s loans, you also have the option to pay their subscription fees for them.

Impressed by CropsProfit’s benefits for Financiers?

See more benefits of CropsProfit for Financiers by downloading the app below:

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21 Jul 2021

New agriculture technology in modern crop farming: 6 trends to get onboard with

The modern world is evolving at a rapid rate through innovative technology and the agricultural sector is certainly no exception. Some changes are born purely out of innovation in the pursuit of improving efficiency and effectiveness, while others are driven by challenges in the modern world. Rising costs of supplies and a shortage of labour changes in consumer preferences for transparency and sustainability are also contributing factors.

This blog aims to highlight some of these key changes and offer insight into how you can get ahead of the curve…

1. Farm automation

We’re no strangers to smart farming technology that automates parts of the production cycle. Now in the new 20’s – we’re taking things to the next level. From more advanced drones to autonomous tractors, robotic harvesters, and automatic robots for seeding and watering – we’re seeing a brave, capital intensive new world unfolding!

 

In light of this, it’s important to keep in mind the other ways efficiency and profitability can be improved (discussed later in the blog) because nowadays, farmers need to stay informed in order to gain more insight to start benefiting from the above-mentioned technology.

 

One must also be cautious not to adopt new technology because it is new. One must be able to clearly understand the benefits and the costs of new technologies like farm automation.

2. Genetic editing

Let’s go back in time to 2015 for a second and imagine someone was telling you that next year it will be possible to buy a kit that allows anyone to precisely remove, add, or alter sections of DNA sequences. Would you have believed them?

 

Well, it’s true. Not only are GMO’s (like them or not) making it possible for us to cope with rising population figures with higher harvest yields, now CRISPR-Cas9 allows us to micro-manage DNA of our own too. But yes, gene editing is a highly specialised skill and in fact, it gets very risky when it ends up in the wrong hands. It’s possible that entire ecosystems will be negatively impacted by one small, regrettable change…

 

For us everyday farmers, gene editing is a trend to research and stay on top of. If a new, tested version of one of our crops is released into the market tomorrow, we might want to know about it!

3. Precision agriculture

It is now possible to control more variables of crop farming such as soil chemistry, moisture levels, pest stress and micro-climates. Modern precision farming advice provides farmers with more accurate insight for increasing efficiency and sustainability of crop yields and managing costs better.   As it turns out, the emerging new generation of farmers are attracted to faster, more flexible ways to systematically maximise crop yields.   In addition to the usual technology and techniques precision farming consultants use (drones, chemical soil tests, etc.), there is now a new software for creating personalised crop marketing plans that reduce a crop’s marketing price risk and enable better collaboration between precision consultants and farmers. But more on this later.

4. Big data

With global food demand set to surge almost twofold by 2050, it will be important for farmers and agricultural suppliers to harness data and innovation to improve productivity.

 

Forecasters at Markets and Markets project that the global agriculture analytics market will spike from $585 million in 2018 to $1.236 billion in 2023 – an increase of more than 110 per cent. What’s fuelling the demand?

 

The benefits of harnessing big data:

  • Precision data boosts productivity through effective resource management
  • Identify good business opportunities (keep your finger on the pulse)
  • Environmental challenges are more easily tackled with data-driven insights
  • Better supply chain management through more accurate information on the sector.

5. Innovative software and AI

As fancy as ‘Innovative software and AI’ sounds, it’s actually one of the easiest trends to get on board with!

 

Whether we’re actively aware of it or not, we actually use AI every day. From Google’s AI-powered predictions to the autopilot settings on the aeroplanes we use to travel – AI is becoming more and more common in daily life and specific in more niche-use cases.

 

CropsProfit helps you to create your own crop marketing plans through easy-to-use digital infrastructure to simplify the marketing side of running a successful crop farming business. See clear visuals of pricing strategies in relation to live crop market prices and easily collaborate with family and advisors.

 

Increasing profitability over the long-term is the primary goal for all producers, as well as your advisors (Financiers, Traders, Precision Farming Consultants). Now there’s an easy way to do this, and it’s an application called CropsProfit.

 

Farming happens to be one of these use cases! Examples include driverless tractors navigating your fields and Knowa (CropsProfit’s AI), a chatbot whose intelligence is improving every day. He’s happy to assist you with your questions and point you in the right direction!

 

6. Harness the power of mobile cloud computing

According to experts, mobile computing was not really a part of our past, but it will dominate our future.[1, p. 3] Having access to the power of cloud computing while moving around will dramatically increase your freedom and productivity – less time will be spent sitting behind a desk.

 

The platform business model connects all participants in value chains through technology into interactive electronic ecosystems, Airbnb and John Deere are good examples. This trend is picking up the pace and already in 2014, three of the world’s five largest firms as measured by market capitalization – Apple, Google, and Microsoft – all run platform business models. [2]

 

With CropsProfit being an easy and reliable mobile cloud platform, any changes made by any team members are updated in real time. Everyone on the team stays up-to-date with the latest changes.

 

On CropsProfit, processing and data storage is not done on your mobile device, which puts the immense cloud computing power at your fingertips, while being available wherever you go! If your mobile device is damaged or lost, your data is still safe.

 

We recommend you download our eBook below, which not only explains things visually but also points to real results the platform has helped farmers achieve:

 

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Reference list

  1. Blasingame, J. (2018) Mobile computing will dominate your future. The Small Business Advocate, Retrieved from https://m.smallbusinessadvocate.com/small-business-article/mobile-computing-will-dominate-your-future-3240
  2. Parker, G.G., Van Alstyne, M., W., & Choudary, S., P. (2016). Platform Revolution, W.W. Nortin & Company, Inc., United States of America, New York, ISBN 978-0-393-35435-5 pbk.
07 Jul 2021

Will a crop marketing team help improve my profitability?

We’ve all heard the saying ‘2+2 = 5’, which essentially defines the word synergy.

But how does this apply to crop farming and the management of a crop marketing team more specifically? Let’s find out…

The Facts:

Groups of 3 – 5 perform better than individuals

This stems from the fact that groups of 3, 4, and 5 perform better than the best of an equivalent number of individuals. A powerful statement when you think about it. [1]

Easier access to specialised marketing skills

Larger farming operations already have more human capital resources with specialised skills, this enables them to adopt more complex forward pricing methods. A team approach will not only complement the larger farms but also empower the smaller farms to have easier access to specialised marketing skills. [2]

4 – 5 team members are enough

According to research optimal satisfaction with team size is found between four and five members. This indicates that smaller team sizes are more preferable, small teams with 4 – 5 team members are enough. [3]

New ideas not considered

Daily collaboration with specialists will mean better decision making and increased profitability. Having trusted partners to gut-check plans can be invaluable, because there may be ideas and technicalities not considered. [4]

Improved communication

The ability of a producer to create and interact with a team of trusted business partners for his farm is important. Analysis of historical margins allows collaborating producers and lenders to set up marketing strategies to reach the desired profit goal more effectively. [5]

Collaborate and gain a competitive advantage

Forget the days of tiring paperwork and stressing over whether you’ve done your crop marketing calculations accurately: With CropsProfit in your pocket, you now have a digital hub that’s been custom-designed for farmers and partners to improve marketing effectiveness and profitability.


CropsProfit captures relevant data about a season or transaction, interacts with live market price fluctuations and advises on recommended next steps. It also allows you to easily run simulations for the purpose of improving decision making by learning from past mistakes and gaining confidence for the future. Team members can create their own test seasons and use their simulations to verify the success of specific approaches, functioning as a home base for collaboration.


Now your trusted advisors can be invited to join your CropsProfit team and quickly get a clear picture of your current situation to offer more beneficial advice. From Financiers and traders to portfolio managers and precision farming consultants – all can be welcomed to your team for the benefits of synergy to be realised. Considering that there is only one paid team member at a given time on a CropsProfit team – the platform also allows you to share the cost through a feature allowing one to pass on the subscription freely to other team members.


So yes, being part of a well-constructed team will most definitely improve your profitability.


Perhaps invite your close family members on the app and give them an outlet to add real value. The possibilities for collaboration are amazing on CropsProfit!

Remember, 2+2 = 5, and if you’d like to learn more about CropsProfit, download the eBook by clicking on the button below, then download the app and you’ll get your first 30 days of full access for free!

 

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Reference list

  1. Laughlin, P. R., Hatch, E. C., Silver, S., & Boh, L. (2006). Groups Perform Better Than the Best Individuals on Letters-to-Numbers Problems: Effects of Group Size, Journal of Personality and Social Psychology, 2006, Vol. 90, No. 4, pp. 644-651. doi: 10.1037/0022-3514.90.4.644
  2. Jordaan, H., & Grove, B. (2007). Factors Affecting Maize Producers Adoption of Forward Pricing in Risk Management: The Case of Vaalharts. Agrekon: Agricultural Economics Research, Policy and Practice in Southern Africa, Vol. 46, No. 4, 548-565.
  3. Hackman, J. R., & Vidmar, N. (1970). Effects of Size and Task Type on Group Performance and Member Reactions, American Sociological Association, Vol. 33, No. 1 (Mar., 1970), pp. 37-54. Retrieved from
  4. Schafer, S. (2016). Cash In With a Well Written Commodity Marketing Plan, Agweb Farm Journal, 02:52PM Nov30, 2016, Retrieved from Agweb.com/article/cash-in-with-a-well-written-commodity-marketing-plan-NAA-sara-schafer.
  5. Roberts, D., & Mc Fadden, S. (2010). Lean Hogs Hedge Model and Crush Margin Calculator, AgStar Scholar Research Project, Department of Applied Economics, University of Minnesota. Retrieved from https://www.apec.umn.edu/sites/apec.umn.edu/files/lean-hogs-hedge-model-and-crush-margin-calculator.pdf
23 Jun 2021

9 Requirements for successful crop marketing plans

1. Have a plan in place

Fear and greed are powerful emotions. They will affect your decisions and a solid plan is the only effective weapon against them. A well structured, personalised crop marketing plan gives the user more security and the feeling of operating a viable and competitive business. [1,2]

2. Address your uniqueness

Crop marketing plans should also account for the different production and hedging approaches that differ between geographic areas.

It is also important to account for the fact that no two farmers are the same and that their crop marketing plans must accommodate this uniqueness. [3]

There is no exact formula, but there is a smart framework of guiding principles and digital tools CropsProfit utilises and you can read more about in part 2 of this topic called why build personalised crop marketing plans with CropsProfit?

3. Account for each season’s variables

“Marketing plans are a crucial part of grain production. Farmers should ensure that whatever plan they decide on at least covers production costs.” [8, p.25]

Every season’s basis delivery differential should be easy to change and the profit recalculated. Post-harvest a crop’s storage cost also automatically be taken into account and exit instructions should be based on reaching the season’s profit goals while taking the added storage costs into account. Displaying this graphically will go a long way to help visualise the impact of storage costs. 

A marketing plan is therefore a proactive strategy to price your crops effectively. A proper pricing strategy must therefore consider amongst other things your profit goals., break-even cost, basis delivery differential, storage cost, anticipated harvest yield, and appetite for risk.

4. Apply marketing principles

“More research and educational efforts are needed with respect as to how much to contract, which type of contract to use, and to identify the frequency of contracting.” [4, p. 562]

For a crop marketing plan to be successful, it is important to practically apply the principles of how much to contract (position sizing), frequency of contracting (marketing cycles), certain and uncertain harvest marketing instruments into a crop marketing plan.

You can read more about effective contracting in part 2 of this topic called why build personalised crop marketing plans with CropsProfit?

5. Know when the market is offering a profit

Linking an up-to-date crop marketing plan to live market process makes you better informed as to when you’ll reach your profit goals and can hedge (sell) some of your crop. [35]

6. Get outside inputs

The ability for a producer to create and interact with a team of trusted partners for his farm is important, even producers and lenders can also work together. [5, 6]

To improve farmer’s marketing management skills a team’s approach will better enable farmers to interact with committed marketing experts on a daily basis. This can lead to more informed decisions and increased profitability for all the participants in a team. [7]

Larger farming operations already have more human capital resources with specialised skills, this enables them to adopt more complex forward pricing methods. A more structured teams approach will not only complement the larger farms but also empower the smaller farms to have easier access to specialised marketing skills. [4]

7. Good reporting

Reports to properly measure the performance each season between seasons, compare actual decisions to simulations, compare different crops and benchmark a farmer’s own performance against other anonymous farmer groups should be available. [5]

8. Incorporate pre-harvest pricing

In the pre-harvest period, there is a lot of uncertainty about what the final harvest yield will be, therefore the reluctance to do pricing. Simplifying the pricing process in this period and using the correct marketing tools are important factors. [2]

Having a realistic crop marketing plan in place during this pre-harvesting pricing period can alert you to profitable marketing opportunities, this can add enormous profits to your farming business.

9. A clear exit strategy

Exit instructions should be based on reaching the crop marketing plan’s preset profit goals for that season. [2]

In order to have an exit strategy that works a good marketing plan must help you to have clear exit rules in place when a situation in the market presents itself. This makes it much easier because you know when you reached your profit goal, you know how much to sell, at what price, and when.

Uncover the value of CropProfit in more detail by downloading the eBook below:

 

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Reference list

  1. Nyman, R. (2015). Farmers preferred end-values related to their use of forward contract, Swedish University of Agricultural Sciences, Department of Economics (Master’s thesis No.  935), ISSN 1401-4084. Retrieved from http://stud.epsilon.slu.se
  2. Usset, E. (2018). Five Common Mistakes in Grain Marketing. Farmers Conference, Feb. 28 2018. Retrieved from  https://farmsmartconference.files.wordpress.com/2018/02/18fs20-ed-usset-five-common-mistakes-in-grain-marketing.pdf
  3. Ueckermann, E. M., Blignaut, J.N., Gupta, R., Raubenheimer, J. (2008). Modelling South African grain farmer’s preferences to adopt derivative contracts using discrete choice models, Agrekon: Agricultural Economics Research, Policy and Practice in Southern Africa, Vol. 47, No. 2, 222-239. doi10.1080/03031853.2008.9523798
  4. Jordaan, H., & Grove, B. (2007). Factors Affecting Maize Producers Adoption of Forward Pricing in Risk Management: The Case of Vaalharts. Agrekon: Agricultural Economics Research, Policy and Practice in Southern Africa, Vol. 46, No. 4, 548-565.
  5. Schafer, S. (2016). Cash In With a Well Written Commodity Marketing Plan, Agweb Farm Journal, 02:52PM Nov30, 2016, Retrieved from Agweb.com/article/cash-in-with-a-well-written-commodity-marketing-plan-NAA-sara-schafer.
  6. Roberts, D., & Mc Fadden, S. (2010). Lean Hogs Hedge Model and Crush Margin Calculator, AgStar Scholar Research Project, Department of Applied Economics, University of Minnesota. Retrieved from https://www.apec.umn.edu/sites/apec.umn.edu/files/lean-hogs-hedge-model-and-crush-margin-calculator.pdf
  7. Brown, A. N., Ortmann, G. F., & Darroch, M. A. G. (1999). Use of maize marketing alternatives and risk management tools by commercial maize farmers in South Africa. Agrekon: Agricultural Economic Research, Police and Practise in Southern Africa, 38(3), 275-301. doi: 10.1080/03031853.1999.9523555
  8. Coleman, A. (2017, September 5). Learn marketing mechanisms to maximise grain profits. Farmer’s Weekly. Retrieved from https://www.farmersweekly.co.za/farm-basics/how-to-business/learn-marketing-mechanisms-maximise-grain-profits/