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Gerlach: too much information can be a challenge when marketing grain   

The president of a commodity brokerage firm tells Brownfield the amount of available information can be a challenge for farmers marketing crops.

Jim Gerlach with A/C Trading Company says, “they have to process all the information that’s out there and it comes at them like a firehose. They’re looking for filters; somebody to filter that information down to a level that they can process. When I got into this business, I started offering farm advisory and commodity broker services in 1995. I could tell you on one hand how many people were doing it right then because most people did it themselves. That’s not the case anymore.”

He says information is driving trade more than the USDA with 65 percent of all grain trades made through algorithms.

Gerlach uses the example of production estimates that are available in other countries like Brazil and Argentina.

“Years ago, the USDA told us what Brazil and Argentina were going to raise. I can go on Brazil’s website, put it through Google translate or most of them have English versions, and get it directly from their government down to the state-level in a major producing country like that,” he says. “So, when that’s available, I don’t need to hear it through the filter of the USDA.”

He says farmers have options on where to go for information when marketing grain.

“I have nothing but respect for USDA, but we all have confirmation bias, and their mission statement is for affordable food. That’s a good public policy but it can maybe conflict with the end goals of a grain or food producer who wants to maximize the price of what they can sell their product for,” he says. “I try to get around that by looking at other sources out there that are putting out information  that may corroborate and may not corroborate what the USDA is saying.”

Brownfield interviewed Gerlach during the recent Agricultural Summit by First Farmers Bank and Trust.