Consistency Is Key
Recently when talking with producers at a trade show, it became apparent to me that marketing milk isn’t an easy task. The most common theme we come across is that producers don’t understand what they’re buying and how it works. They just buy it.
I reflected on this and thought about conversations I have had with my producers, and there is another common theme: Those who are uncertain or maybe even unhappy have not stayed consistent with their marketing plan. Those who seemed to be the happiest have stayed consistent and dedicated to their plan’s strategy. They follow through and trusted in the process. This is particularly true when reviewing indemnity data, or what has actually been paid to producers. Consistency has led to greater results and more payments to producers.
I’m often asked; “What is the market going to do? Is it going up or down?” I do not know, and I do not want to make a statement that can negatively impact my clients. I often find myself telling producers, “The milk market doesn’t care what we think.” What I do know is that staying consistent with a proven plan works, and I can prove it to you.
Another question I often get is “Why should I buy insurance if the price is below my break even?” This is a great question, and the answer is “because things can always get worse.” Taking a look at milk prices from 2008-2020, there were only three years where we could consistently protect milk while prices were above $17.00 on the board. In two of those years, milk ended up going down and in one of those years we saw prices rally to $22.00. This leads me right back to consistency. Producers who have stayed consistent with a proven plan continue to be put in a better place.
At the end of the day, it’s not important where milk prices are, and it’s not important where they are going to go. What’s important is to establish a marketing plan that is proven to work and stay consistent. Worry less about the markets and enjoy farming more.
Contact Travis Glaser, Owner and Agent at ARM Services, to learn more about developing your consistent risk management strategy by calling 715-456-5607.