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Abstract
Better prices are the primary motive for farmers to store and market grain after harvest. However, realizing higher prices for post-harvest delivery than those offered for delivery at harvest or ‘off the combine’ is no given. In earlier articles (farmdoc daily, December 8, 2023; December 15, 2023), I described the post-harvest marketing challenge and quantified how much of Illinois corn and soybean production remains to be marketed after harvest. Roughly 60% of corn and soybeans produced in Illinois remain to be sold at the end of the calendar year, but this aggregate number hides much variation across farmers. Many farms have essentially all of one year’s production in inventory at calendar year end. The extent to which unsold production presents a price risk management problem for the farm depends on how big and how variable are the possible post-harvest marketing gains: the difference between the price the farm receives for post-harvest sales less what they could have received by selling at harvest. While we expect marketing gains to be positive because of typical seasonal price appreciation, nothing ensures this is so. Moreover, farms can use a wide range of marketing contracts to make sales both pre- and post-harvest, so determining the ‘correct’ pre- and post-harvest comparison is difficult. In this article, I examine the post-harvest marketing performance of farms in the Illinois Farm Business Farm Management Association. I consider the distribution of marketing gains by comparing the price a farm receives post-harvest to the price received for near-to-harvest sales by the same farm in the same marketing year. This eliminates the confounding influence of location, marketing skill, and other farm-specific factors affecting marketing performance. I find farms realize gross returns to post-harvest marketing that are on average roughly consistent with typical seasonal cash price increases. Farmers who realize sales after January 1 receive prices that are on average consistent with the typical increase in price following the near-to-harvest period. However, the range of realized outcomes is large and negative returns are common. On a risk-adjusted basis, the returns to post-harvest marketing appear to be small.