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