While weather and trade troubles have brought headaches for many, these challenges have brought marketing and profit opportunities as well. Thursday officials announced more details about the Market Facilitation Program (MPF) payments, adding another piece to an already confusing puzzle.
“Coming into 2019 [guys were] wondering if they were going to be able to weather the storm—the last several years have been a real struggle as far as net income has been concerned,” AgMarket.Net’s Matt Bennett told U.S. Farm Report Host Tyne Morgan. “I think producers were looking for every avenue they possibly could to make their situation just a little better. MFP and insurance payments put them in better positions for two reasons.”
The 2019 MFP payments are based on planted acres, not on the formulas created in 2018 based on trade impact. For this reason, DuWayne Bosse with Bolt Marketing said announcing MFP payments would occur before planting was over definitely influenced planting decisions.
“In my area it pushed more people to plant corn when they announced it would be off planted acres,” Bosse said. However, the South Dakota resident is surrounded by a shocking number of prevent plant acres, which could limit who receives MFP payments.
“Prevent plant will get a payment if you plant a cover crop—but we’re too late now to even do that,” he adds. “But we’re going to try to do that [plant a cover crop] to get the payment.”
So, how do you make a marketing plan for unknown production?
If you’ve been watching the corn market over the past few days, you might be feeling more bearish. However, experts say the bulls will be back and today even basis is telling farmers to be bullish.
“There’s still a chance [the market will become bullish] when you look at yield and harvested acres,” Bennett said. “But when will we find out? A long way from today. October’s report will be like the old September report when they’re counting kernels. But I don’t think we’ll know total production until January. So, if you’re waiting for the rally based on supply you’ll have to wait a little longer.”
In terms of planning, each expert says don’t have absolutes, don’t limit what the market can and can’t do and be flexible as opportunities present themselves.