Jerod Wolff

[Jerod Wolff @JWolff77]

@vulturetrades I’m in!

[Douglas A. Boneparth @dougboneparth]

This is too accurate.

[Jerod Wolff @JWolff77]

@adam_littman @Kotyjo This does happen... And it's worth it.

[Josh Linville @JLinvilleFert]

$34,800/acre...sold

If this farm went continuous corn, yielded 250 bushels/acre every year, sold every bushel at $5 and HAD NO EXPENSES...

It would still take nearly 30 years to break even.

https://t.co/kw5XRK7l5u

[Nick Horob @NickHorob]

It's no secret that marketing grain is hard.

One of the more interesting explanations I've come across as to why was introduced to me by Cullen Wilson (@sanegrain). It's the concept of shrinking pies.

“Negotiations over a shrinking pie are especially difficult… People tend to be much more easy going when they bargain over an expanding pie.”
- @kahneman_daniel (Nobel Prize-winning Behavioral Economist and co-author of Thinking, Fast and Slow)

Let's say you're a farmer and you're estimating that you're going to produce 50,000 bushels of wheat in given crop year.

You forward contract 10,000 bushels. Your crop production "pie" shrinks to 40,000 bushels.

If prices rally, you still have more estimated production to sell! Nothing to worry about, right?

You have people like me who have long screamed from rooftops, “a farmer is always long grain until retirement! Sell, sell sell!”

Even though you are almost always long grain, you likely still hold each crop year in a mental account or within an individual pie.

As the pie gets smaller, the decisions get harder.

Furthermore, price rallies often occur during the growing season and come during times of weather stress.

So your pie shrinks when you sell and you're mentally shrinking it due to weather uncertainty. Each sale becomes incrementally harder as the pie shrinks further.

How can you deal with this?

- During rallies, look to make sales across multiple years or multiple pies.

- Keep track of your sales/hedges in a spreadsheet or a tool like Harvest Profit. Make notes stating how you were feeling when you made the decision. As time moves on, you'll become more objective about those past decisions and less emotional about decisions in the present.

- A direct piece of advice from Cullen: Anticipate regret before a decision and remember the market always changes (up or down) after a decision is made. Kahneman teaches that when we anticipate regret before a decision, we are likely to experience less emotional pain when we look back.

- Set up different stress tests for final yield and price to anticipate your worst case scenario. Save these for future reference so you can begin to better calibrate your downside estimates.

Grain marketing is hard. But you can make it easier for yourself.

[Jerod Wolff @JWolff77]

@KimReynoldsIA The impact is large!

[Jerod Wolff @JWolff77]

@NickHorob Why is no one talking about that luscious, green grass? Peak Dad mode.

[Jerod Wolff @JWolff77]

@PopularLiberal slow down https://t.co/g49T5CXEQz

[Jerod Wolff @JWolff77]

@Galylynn @BidensWins https://t.co/g49T5CXEQz

[Jerod Wolff @JWolff77]

@jason_in_denver @Freedomville_ @BidensWins https://t.co/g49T5CXEQz

[jacob @jxcxbrxss]

#oatt

[egg @eggdailyweather]

they had to know what they were doing #wxtwitter #ilwx #derecho

[farmdoc daily @farmdocDaily]

The Biden administration plans to increase the amount of #biofuels that #oil refiners must blend into the nation's #fuel mix in 2023, 2024 and 2025, but the plan includes reducing mandates for #corn-based #ethanol from proposed levels.

https://t.co/rjE9hWm4Lq

[Susan Stroud @SusanNOBULL]

Per Bloomberg:

Glencore’s Viterra Said in Merger Talks With Grain Rival Bunge 2023-05-25 17:09:25.375 GMT

@mhirtz