The Facebook Grain Marketing Discussion Page seems to have much commiseration going on with prices being as low as they are while throwing in crop conditions throughout Minnesota and the corn belt. Throw in the hope of higher prices ahead, things seem quite bleak. Now is the time to begin anew the grain marketing vs grain revenue management discussion.
How Our Process works
First of all, most grain marketing focuses on where the market is headed and should I sell now. A difficult task at best. Here is what we do at Heartland. In working with clients, the first assumption we make is that given where the market is today, if the market does not change from now to harvest and beyond, we can set a “line in the sand” revenue budget based on acres planted and APH. From there, we run a revenue shock analysis using our proprietary models showing you declines or gains in revenue over a range of prices. We are not as concerned about how much your revenue increases should we see higher prices ahead; we are concerned with the reduction in revenue you could see should prices decline. Let’s defend a revenue floor. This revenue floor would be the lowest revenue you could live with, no matter how low the market may go, so that you can manage the ongoing farming enterprise.
Components Of The Grain Revenue Process
This year, the Grain Revenue Management Process has to take into consideration the revenue and expense related to Prevent Plant acres, crop insurance, potential yield reductions due to growing conditions. Managing these components is well beyond what the market may do on the next USDA report. It is a process that we continue to manage with you from planting to harvest.
The Difference Between Marketing & Revenue Management
Below is the AI by ChatGPT difference between marketing and revenue management:
Marketing and revenue management are two distinct but closely related functions within a business, particularly in industries such as hospitality, travel, and retail. While marketing focuses on customer engagement, brand awareness, and long-term relationship building, revenue management is more concerned with optimizing pricing and inventory to maximize short to medium-term revenue and profitability. Both functions are essential for driving business growth and maintaining competitiveness in dynamic markets.
We would welcome the opportunity to have a discussion with you.