FBN adds crop marketing advisory services

Last year, the Farmers Business Network first launched its Crop Marketing services in June, offering growers a digital platform that lets them find the best prices when marketing their grain.

Now, FBN is stepping up its efforts to provide additional marketing opportunities to growers.

Devin Lammers, head of commodity crop marketing at FBN, says after visiting with growers over the last year, it became clear that a more comprehensive approach, with more support in the decision-making process, was needed.

"Most farmers know that with the deteriorating commodity markets, they need to be better at marketing their crop," Lammers says. "It might be a farmer who's been doing this for 40 years, and they realize they can't do the same thing, delivering grain off the combine at harvest. Or it may be a young farmer realizing that to be a successful venture, they really need to be a good marketer."

There's a lot of information out there surrounding crop marketing, and it's not easy to know how to put it to use. Marketing services might cost anywhere from $5 to $7.50 per acre, which might total anywhere from $6,000 to $25,000, depending on farm size. This is why more accessible decision support is needed, Lammers adds.

Decision support tools
A new tool being launched as part of FBN's Commodity Crop Marketing service is Cash Grain Management, which Lammers describes as a full-service advisory program for a flat fee of $2,000 per member. This includes the Market Intelligence service, providing in-depth data and analysis, a marketing newsletter with pricing recommendations based on analysis, and a personal, full-service advisory program.

"Advisers are working with that farm to personalize that to the operation, making a marketing plan, day-to-day decisions, providing a sounding board for the farmer's decisions, and oftentimes keeping the farmer honest," Lammers says, noting this might mean being honest about what the farmer's breakeven is, and realistic expectations for reaching a certain price for profit.

"Part of the conversation is establishing the plan, figuring out the breakeven, talking through the goals. We usually tell famers it's unrealistic to hit the market high every time,” he says. “We're trying to have a consistent marketing strategy that data and history have shown to be successful."

However, some farmers will just want to sign up for the Market Intelligence service. The subscription is $19 per month, or $199 per year. It includes weekly analysis-based marketing reports, webinars and updates on factors influencing the market, and what those influences mean for pricing and decision-making for the farmer. The Market Intelligence service also provides historical data on different times for spikes in the market.

Brandon Hunnicutt, who farms near Giltner, Neb., has been using FBN's Commodity Crop Marketing services since last year, including the Cash Grain Management and Market Intelligence services.

"I compare it to when ‘Moneyball’ was introduced into baseball. There was all this information you could use, but until we figure out how to use it to make better decisions, it's not doing any good," Hunnicutt says. "As we're getting into this, we're able to utilize more data, get to that data quicker, and are able to rely on the things we're seeing out there to make faster decisions. Through Market Intelligence combined with other FBN tools, they're bringing everything into one comprehensive unit."

New marketing services
Then there's the FBN Brokerage service, a low-cost commodity brokerage account where members can trade on the futures market. This includes several pricing tiers, with the lowest tier at $1.50 commission per side, up to about $4.50 per side when including exchange fees, NFA fees and clearing fees. This also includes access to FBN's Marketing Intelligence newsletter, as well as access to a third-party trading platform.

Among the new services offered is FBN's Cash Contract service, which allow members to forward-contract with more flexibility.

As part of its Cash Contract service, FBN is offering several different contract options, including:

• FBN's Independent Hedge-to-Arrive, which gives producers the assurance provided by an ordinary HTA by locking in a futures price with FBN, along with the flexibility to negotiate and market their grain for the basis they want

• an averaging contract that lets the grower market grain for a price that's averaged out rather than set at the time of the contract to avoid low points over the given time period

• FBN's Deferred Futures contract, where a farmer can deliver grain for a 70% cash price paid to the farmer upfront by FBN, but still lets the farmer defer locking in a futures price

FBN works with elevators, export buyers and end-users, such as ethanol plants and feedlots, to provide these opportunities.

"FBN is the buyer, and we can allow the farmer to take the grain wherever they want to," Lammers says. "As these programs grow and there are more bushels to sell, we will work with farmers however possible to pool that grain together and take it wherever we can get better prices. Ultimately, what we're trying to do for farmers is allow them to be their own elevator with financing stools, structured financing, and price discovery tools."

"In our area, there are growers who are able to produce different crops — we have the ability to grow popcorn, white corn, non-GMO crops and now pulses — but they don't always know where to market their crops," Hunnicutt says. "When you can grow those crops, and you can say we have other markets available through these contracts, you might get a better bid, instead of taking whatever local bid we can get. When you're marketing from a wider area, you're also protecting the risk for the end-user."