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| Risk Management – Marketing |
Marketing is more than just selling wheat. Marketing decisions begin before planting rather than after harvest. Deciding which market class or variety to grow is the first part of marketing. Unfortunately there is no one 'best' marketing strategy that fits all growers or even one that fits a specific grower from year to year.
Marketing should be viewed as an ‘inexact’ science and marketing activities must be adjusted as conditions change. One way to gain insight into market behavior is to look at historical data.
Average Seasonal Wheat Price
Historical information can help with marketing decisions. However, past information should be used with caution in predicting the future. Markets are dynamic. Supply and demand relationships change constantly.
The following graphs depict historical prices for wheat in Portland and Ogden. A comparison is shown of average prices over the past 10 years, 5 years and 1 year. While all wheat prices tend to move in the same general direction, year-to-year price variation exists among different wheat classes and protein levels. Knowing the expected price movement within the marketing year can help in developing a marketing plan.
Market aberrations are dampened the longer the time period covered. |
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