Mark Gold of Top Third Ag Marketing speaks at the 2019 Ag Is Everyone's Business event, hosted by the Highland County Chamber of Commerce and Southern State Community College. (HCP Photos/Caitlin Forsha)
Mark Gold of Top Third Ag Marketing speaks at the 2019 Ag Is Everyone's Business event, hosted by the Highland County Chamber of Commerce and Southern State Community College. (HCP Photos/Caitlin Forsha)
Close to 300 people enjoyed a discussion of agricultural markets, with tips on being proactive marketers, during the annual Ag Is Everyone’s Business, hosted by the Highland County Chamber of Commerce and Southern State Community College for a seventh straight year.

Chamber of Commerce community relations coordinator Erin Sheeley told The Highland County Press that approximately 275 people attended the popular annual celebration highlighting agriculture at the local, state and national level, held at the SSCC Patriot Center.

This year’s event included a presentation by keynote speaker Mark Gold of Top Third Ag Marketing, a former 20-year member of the Chicago Board of Trade. As managing partner of Top Third Ag Marketing, Gold can be heard daily on Nebraska radio KRVN and Kansas radio KFRM, as well as appearing as a regular guest analyst on “U.S. Farm Report” and “Ag Day TV,” and his twice-daily audio grain marketing comments are featured on AgWeb.

Following a breakfast served by Jill Reed of Farmhouse Catering and the presentation of “So God Made A Farmer” as read by Paul Harvey, Southern State Community College president Dr. Kevin Boys welcomed the crowd.

“We’re so glad that each year we have a day to celebrate agriculture in our community,” Boys said.

Boys thanked the SSCC agriculture students and local high school FFA members for volunteering at the event. In a change from the usual introduction of sponsors and public officials, Boys instead recognized the farmers in attendance, asking those who “own a farm, work a farm or have anything to do with a farm” to stand.

“Thank you so much,” Boys told them. “Agriculture is the single-largest business in the state of Ohio, certainly in Highland County, and it’s just so great to be able to celebrate agriculture.”

Jeff Meyer of Merchants National Bank provided the invocation, with Highland County Fair Queen and McClain FFA member Bryn Karnes leading the crowd in the Pledge of Allegiance.

Randy Lennartz of Highland District Hospital, chairman of the Highland County Chamber of Commerce board, thanked the sponsors, donors and volunteers for the event.

Lennartz also thanked the Chamber staff, including executive director Melissa Elmore, who recently announced that she will be stepping down from the position. Elmore has been the executive director of the Chamber since the inception of Agriculture Is Everyone’s Business in 2012.

“This will be her last Ag event,” Lennartz said. “Melissa, thank you for everything you’ve done for agriculture and the Chamber.”

Seth Phillips of Gibbs Insurance Associates, who is vice chair of the Chamber board and a member of the Ag Is Everyone’s Business committee, introduced Gold. The keynote speaker told the crowd that his goal was to help make them “better marketers” through his presentation.

“Historically, marketing has been a problem. Statistics tell us that the average American farmer generally sells his crops in the lower third of prices that are available to him during the year,” Gold said. “Our job at Top Third is to get you in that top third, rather than the bottom third.”

Gold said that farmers this year “are going to face extraordinary risks,” including high land prices/cash rent and high input costs, such as fertilizer, chemicals, seed and water. In a PowerPoint presentation, Gold told the crowd: “You can’t afford to pay high inputs and then sell crops at cheap prices. Managing your risk by becoming better marketers will be critical to maintaining profit margins.”

“We believe that managing your risk, by becoming a better marketer, will be the key to your success,” Gold said.

Gold showed slides comparing fluctuations in U.S. and world carryouts on corn, wheat and beans and reminded that U.S. trade talks with China “could change these numbers dramatically.”

“We have to look at these opportunities and be willing to capture those opportunities when we’re there,” Gold said. “I know for many of you, your granddad told your dad, and your dad told you, ‘don’t sell it till you get it in the bin.’ For 150 years, that was pretty good advice. But now with the new crop insurances and policies, we can feel much more comfortable about selling grain ahead of time than we ever have before, and it’s critical that you look into these opportunities well before harvest.”

Gold offered four pieces of advice to become a better marketer: Develop a marketing plan; combine effective crop insurance with your marketing plan; use options to manage risk; and don’t become a speculator.

To develop a marketing plan, Gold said that farmers have to “spend more time” than most do currently. He told the crowd that it was important to devote “at least five minutes a day to becoming a better marketer.”

For those five minutes, Gold suggested making a chart of local prices to look for opportunities or at the very least subscribe to emails with market information. “You’ve got to be more proactive,” he said.

Along with coming up with a marketing program, Gold said it is important to invest in the right insurance for one’s operation. He encouraged the audience to meet with local crop insurance agents.

“All too often, people when they buy crop insurance or revenue insurance think to themselves ‘I’ve got revenue insurance. If this market goes down, I’ve got more income coming in,’” Gold said. “If you raise the crop and you’re at or above your APH (actual production history) and prices go down, you don’t get a check. You only get the check on lost bushels. If your APH is 150 bushels of corn and you’re down at 100 bushels of corn for whatever reason – the market’s gone down – now you’re going to get a big check from the insurance company. But if you raise 160 bushels of corn and your prices go down, don’t expect that revenue policy to pay off. You still have to manage the risk on what we call live bushels.”

For his third point, on using options to manage risk, Gold discussed put and call options. As defined by the U.S. Securities and Exchange Commission, a put option “is a contract that gives the buyer the right to sell shares of an underlying stock at the strike price for a specified period of time,” whereas a call option “gives the buyer the right to buy shares of an underlying stock at the strike price for a specified period of time.”

“I want you to think about a put option as an insurance policy,” Gold said. “It’s an insurance policy you can buy today to protect the price of your crops and livestock, in case the price goes down, until you sell it.”

On the other hand, Gold said “a call option is your insurance policy once you’ve sold the grain, in case prices go up.”

“What you have to understand is you’re going to have these opportunities, and you’ve got to be willing to accept them,” Gold said.

To illustrate, Gold said a deer hunter who sees a 12-point buck needs to “pull the trigger and take it down,” not wait to see if a 14-point buck comes along later.

“When you see a ‘12-point’ price out there, maybe for $4.40 corn, go ahead and pull the trigger,” Gold said. “But now, buy a call option and keep that price alive.”

Gold advised that farmers who still have unsold grain in the bin from 2018 “need to buy put options to protect it,” as well as protecting 2019 crops.

“Whether it’s in the bin or it’s going to be on the field, you need to protect that now,” Gold said. “We don’t know what the market’s going to do, so we’re going to do it right now. If you buy those puts and the market goes up, great. You’re going to lose the 10 cents on that corn. If the market goes down, you’re protected.”

Gold’s last piece of advice for becoming a better marketer was to avoid becoming a speculator.

“When you’re holding all this grain in a bin and you haven’t protected the profit you’re about to plant, what are you really doing with that grain? You’re speculating with it,” Gold said.

Gold said the odds of a speculator “beating the pros in Chicago” are about seven percent.

“That means 93 percent of you lose,” he said. “You’ve got to quit speculating in these markets. You’ve got to be proactive and manage those risks. Speculating is a tough, brutal job, even for a professional like me.”

According to Gold, two factors that determine if an option has value are whether the risk/reward ratio justifies the expense and whether there is at least a 4-to-1 risk/reward ratio. The key factor in determining if an option has worth is to look at where prices fit in historically – in the upper, middle or lower third, he said.

“If you’re in the upper third of historical prices, wouldn’t that be a good time to sell grain?” Gold asked. “If you’re worried that maybe there’s going to be a big drought and you’re scared to sell some grain and you’re just not sure, wouldn’t that be a good time to buy a put option to protect all that risk? If you’re down here selling grain in the lower third of historical prices, wouldn’t that be a good time to buy a call option in case the market goes back up?”

Gold also shared charts of historic prices for various categories, including corn, wheat, cattle, hogs and dairy, with each showing many fluctuations. Gold said he always advises clients to sell high when they have the opportunity “because these markets always go back down.”

A chart of some of Gold’s recommendations was also displayed before the speaker concluded by advising the agricultural community to “be proactive” and seek help from market experts whom they trust.

“Good times are not far away, but until we get there, we have to manage the risk in the meantime,” Gold said.

Following Gold’s keynote address and a Q&A session, Highland County Chamber of Commerce board member Rick Williams of Rick Williams Auction Company conducted an auction of a Farmall 656 pedal tractor and grain cart donated by Bane-Welker Equipment and a John Deere 720 pedal tractor donated by Five Points Implement. Purchasing auction items were Russ Newman Insurance, Charley Stevens of Stevens Hardware (who made a donation to the Hillsboro FFA) and Merchants National Bank and Shannon Valley Farms.

Williams, Elmore and Gold also drew names for raffles, with Doug Henry, Kenny Stevens and Penny Blackburn among the winners.

Sponsors of Ag Is Everyone’s Business included Bane-Welker Equipment; BioGene Seeds; Carraher Ag; Ervin Hill Inc./Mark Edenfield Fuel/Holtfield LLC; First State Bank; Five Points Implement Company; Great Oaks Career Campuses; Hamilton Insurance Agency; Highland District Hospital; iHeart Radio/94 Country WKKJ/Buckeye Country 105.5; J. Boeckmann Excavating; Merchants National Bank; Nutrien Ag Solutions; Ohio Asphaltic and Limestone; Peoples Bank; Premier Crop Insurance/Amy Magulac Boeckmann; Russ Newman Insurance; South Central Power; Southern Hills Community Bank; Southern State Community College; Tom Pitzer Trucking; and Ventura’s Feed and Country Store/Master Feed Mill.

Ag Is Everyone’s Business committee members are Jeff Dickey, Brad Elmore, Amy Hamilton, Jim Hamilton, Tim Parry, Phillips and Williams.