Breakeven costs will help producers navigate uncertainty in 2022


Breakeven costs will help producers navigate uncertainty in 2022

A grain market analyst says knowing breakeven costs for 2022 will help producers navigate volatility in the markets.

Matt Bennett with AgMarket.Net tells Brownfield producers should create a budget and start by using an average crop yield, and “Make sure we’re taking care of ourselves by buying insurance this year.  The bottom line is put some floors under your prices.”

He says producers should quantify the worst-case scenario. “But leave room for the upside because this is the type of the year where if we had weather issues, we look at $6.30 corn right and know and think that’s a heck of a nice price, but $6.30 corn could look cheap if we have weather issues this year.”

And, Bennett said producers don’t need a repeat of 2012. “Some folks sold as the year went on because the price continued to rally and then they sold too much,” Bennet says. “I don’t want to get into that situation so I’ve been preaching flexibility but lock in a worst-case scenario because there is so much money on the table and we need to be latching on to as much as we can.”

Brownfield interviewed Bennet at the AgMarket.Net meeting in Kansas City.