Christmas is upon us! Many experience 10 days of what is supposed to be relaxing family time, yet somehow we are left more exhausted than refreshed when it’s over. Just when you thought you couldn’t get more tired, after the holidays are over market outlook season begins.
Farmers get inundated with market forecasts during the winter months, as it’s rare to find a meeting that doesn’t have at least some market discussion in the speaker line-up. These can be highly valuable – after all, it’s an opportunity to get the latest opinion from some close market watchers and ask questions. Not all outlooks will tell the same story, so compare notes, see where they differ and why, and probe deeper into those uncertainties.
Every market outlook needs to be taken in context for two important reasons.
First, market outlooks have a shelf life and factors change constantly. Outlooks are dependent on things that we ‘know we don’t know’ (such as weather), and are vulnerable to things that come out of left field. Even if today’s knowable factors are will analyzed, and potential future events are properly handicapped, the final outcome is simply unknowable with any level of confidence.
Second, where a market outlook can set up the bigger picture, marketing decisions are ultimately made at the farm level. Incorporating the overall market outlook is only one part of a good farm marketing plan. It must take into account a multitude of operation-specific dynamics that drive marketing decisions including crop mix, cash flow needs, risk tolerance, decision making process, management style, storage considerations, and local market dynamics (to name just a few).
Ultimately, growers should look forward to ‘market outlook season’ in the months ahead. Use it to help formulate an opinion, consider where opinions vary, and take into fresh sources of information and analysis. Still – don’t assume that sitting in on a couple of meetings is enough to figure out the plan for your farm – that’s just the beginning.
Jonathon Driedger, Senior Market Analyst