Farmers must do better job of selling crops, says marketing analyst
NjSWARK, Del. There’s a lot
of concern these days over the
need to increase industrial
productivity in the U.S. But the
American farmer doesn’t have to
hang his head in shame when lack
of productivity is discussed.
“He has few peers when it comes
to getting the most from the land
he farms,” Merrill Lynch Vice
President H.R. Purkey, told far
mers gathered for the recent
Delmarva Com and Soybean
Technology Conference in
Salisbury, Md.
The marketing analyst had high
praise for the production ef
ficiencies achieved by today’s
farmers. But he said many are
missing the boat when it comes to
marketing their crops. That’s a
costly mistake no one can afford to
make.
Fanners are good at discovering
more productive uses of their time,
equipment and resources. But does
the American agribusinessman.
spend an appropriate percentage'
of his time and effort on
marketing, Purkey asked.
|fj“ls he aware of the ever
evolving factors that affect price?
Does he have a marketing
strategy? Does he understand the
different market factors that
constantly emerge? And does he
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TO THE
DRAWBAR!
INDEPENDENT TESTS SHOW STEIGER TRACTORS
TRANSMIT AN AVERAGE 87.78% OF
IT'S ENGINE H.P. TO THE DRAWBAR.
THE COMPETITION AVERAGES 77.17%.
make time to effectively market
his production? My experience
tells me he does not.”
To remedy this problem, Purkey
said farmers need to commit
themselves to developing a
knowledge base which will allow
them to sell their crops effectively.
This involves understanding the
prevailing economic climate,
recognizing the conditions that
affect it and potential changes
which may alter the picture.
Purkey said he doesn’t agree
with those “doom and gloomers”
who predict American economic
disaster. “We may have become
somewhat complacent," he said,
“but our economic resilience
fostered by our competitive ability
should once more allow a steady
economic growth." And though the
short outlook is g.lum, he said he
considers the long-range future
bright for American agriculture
“the most important industry our
country has.”
Prices farmers get for their
crops in the months ahead will be
determined in part by such factors
as interest rate levels, overseas
demand for U.S. grain, and
available energy supplies, he said.
.With the government apparently
competing with the private sector
for funds, will interest rates
THE FACTS PROVE IT:
COMPLETE TEST RESULTS FROM STEIGER OR YOUR STEIGER DEALER
remain high? “I’m atraid so,” he
said, though it’s too soon to know
what impact recently liberalized
IRA and Keogh provisions will
have on individual savings ac- f
tivity. This, in turn, will determine
the amount of loan money
available and could affect interest
rates.
Americans have gotten out of the
habit of saving, he said. As a nation
we’ve recently been spending
about 9b percent of our income and
saving only about five percent. But
this attitude may be changing.
Saving a little more “for a rainy
day” could well gain in popularity.
In the world marketplace,
Purkey said the problem is not
lack of demand for American
products, but one-sided trade
policies. “Mutual dilegence must
be exercised," he said, “to insure
that protectionist barriers aren’t
implemented against our country
which might create a political
atmosphere of retaliation. 1 don’t
believe barriers do much good.”
What of the overseas market for
American grain? “The 19S1 world
grain production was a record,
even with the poor Russian crop,”
he said. “We’re all aware of the
record 1981 U.S. corn and wheat
crops. The soybean crop was ex
cellent. The problem is, supply
POTS
mer you pay for
Lancaster Farming, Saturday, February 27,1982—A17
simply exceeds available
demand.”
Last year agricultural exports
totaled nearly $44 billion dollars or
almost 19 percent of the total U.S.
export volume of $234 billion.
Grain exports represented almost
$3O billion, which shows how im
portant they are.
What will Russian gram needs be
this year? Will the Polish situation
rekindle an export embargo on
U.S. gram? “1 certainly hope not,”
Purkey said. Unless conditions are
absolutely ideal and the Russians
manage to produce a bumper crop,
he expects them to need to buy
world grain for years to come.
“Their system, along with un
cooperative elements, simply
hasn’t proven capable of providing
their food needs, let alone those of
their Red Block neighbors.”
Beyond this, the increasing
world population assures a con
tinued demand for American
grain. Whether it’s Russia, China,
India or other countries, the need
is there, he said. The U.S. has
become the world’s residual grain
supplier and, with improved world
wide economic conditions, our
gram will be in demand.
As for the demand for gram to
produce fuel, the predicted boom
in this quarter hasn’t materialized,
10.
★ NOTE: All information is current as of Jan. 1982.
★ NOTE: Drive Train Efficiency is calculated by
dividing the highest drawbar horsepower attained
in the test by the engine horsepower. The per
centage represents the maximum ratio of engine
horsepower transferred to the drawbar on tested
tractors.
and Purkey doesn’t expect it to
occur, at least for the time being
because of an easing in the fuel
crisis.
Other factors could affect the
price of grain over the months
ahead. It’s too soon to tell, for
example, whether the recent tax
cuts will have their desired effects
on the economy. The Mid-East
situation could flair again into a
world political hot-spot. Relations
between Russia and the People’s
Republic of China could worsen, or
possibly even improve.
“Either situation would create
ripples around the world,’’ the
analyst said. Some new world issue
could also emerge. All of these
factors make the task of market
analysis more complicated, and
Purkey said he sometimes yearns
for the good old days when there
weren’t so many extraneous
elements to consider.
He listed a number of near term
market factors to watch for: the
emerging Brazilian and Argentine
crops, the continued good pace of
U.S. soybean exports, the price
relationship of corn and soybeans
as spring planting decisions are
made, the anticipated cost of
growing com vs. beans this year,
adherence to the just-announced
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TOP TEN IN
DRIVE TRAIN
EFFICIENCY
MODEL
STEIGER
ST-280 (CAT) 91.92%
STEIGER
ST-280 (CUMMINS) 91.59 %
STEIGER
PTA-280 (CUMMINS) 88.95%
STEIGER
ST-225 (CAT) 87.99%
STEIGER
PTA-280 (CAT) 87.49%
STEIGER
ST-325 (CAT) 86.75%
VERSATILE
875 (CUMMINS) 86.44%
VERSATILE
835 (CUMMINS) 86.23%
STEIGER
PTA-325 (CAT) 85.13%
FORD
FW-60 (CUMMINS) 85.24%
STEIGER AVERAGE 87.78 %
Others Average 77.17%
OB HP/ENG HP