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Consultant says don’t jump the gun on pricing 2024 grain

An ag consultant suggests farmers hold off on pricing grain for 2024.

Retired Iowa State University Extension Farm Management Specialist Dr. Steve Johnson says although current commodity prices are strong, he recommends waiting until this May or June and playing off uncertainty of grain production in the northern hemisphere.

“Even though soybean prices might be slightly higher in that late winter period because of South American weather, I am into that spring uncertainty and that us because 85% of feed grains are grown in the northern hemisphere.”

He says farmers can use a hedge and work with a broker for flexibility but says they need to understand the margin call risk.

“If that futures price goes higher after you sell futures in that spring pricing period, you are subject to margin call so working capital is going to be important.”

He says farmers will need to maintain more working capital in 2023 compared to the last few years because of inflationary pressure and higher interest rates.  

Johnson was the featured speaker during a recent Ag Minded Hour webinar hosted by Farm Credit Illinois.