Incremental Sales to Win at Commodities

  September 1, 2023

When it comes to marketing commodities, the greatest temptation on earth is to swing for the fence. The financial windfall and pride that comes with selling all of your product at the top of a market move is so alluring that few can turn away from the temptation of trying. The inherent problem is very few, if any, can accomplish this task on a regular basis. So what is the better option?

To use a baseball analogy, many believe the more sound principle is to consistently hit singles and doubles while avoiding strike outs. Tony Gwynn had 9,288 major league baseball plate appearances while striking out only 434 times which is an astonishing 4.7% of the time. While not generally regarded as such, he should be considered to firmly be in the discussion for greatest hitter of all time. By not striking out 95% of the time, he was an incredibly valuable asset to his team. Similarly, if you can avoid making the big mistakes when marketing your ag products, your results should be fine over time.

So how do you go about hitting singles and doubles when selling your grain, cattle, milk or other commodity? Simply put: incremental sales. When a market moves in your favor at a price that is profitable for your operation, sell some and if the market continues to move in your favor, make more incremental sales as it goes up. If the market keeps on rallying and your first sale is your worst sale, most people would be perfectly happy with this result. If the market rally turns out to be short lived and heads lower, at least you are somewhat comforted knowing that you sold some. Generally, for best results, don’t put all your eggs in one basket.

Contact our team for results to buy or sell your property!