Marketing Policy
The desk's own rules, the numbers behind them, and what each one is catching this morning.
The rules
| Rule | Setting | Catching today |
|---|---|---|
Never price below break-even plus a cushion A break-even is itself an estimate, so pricing exactly at one is pricing at the midpoint of an error bar. The cushion is the desk's margin for that. | $0.10 over cost | 32 Behind pace while profitable |
Elevator instruments only. Nothing that can carry a margin call A margin call converts a correct marketing decision into a cash crisis at exactly the moment the market is going against the physical crop. It is also not explainable to a hundred families at once in a limit-up week. | Cash, Forward/HTA, Basis | Not enforced |
Do not forward contract new crop past the insurance guarantee Above the guarantee a forward contract is a bet on the weather, and the loss is uncapped: a short crop and a rally arrive together, so the bushels have to be bought back at the worst price. This is the rule on the list that has actually bankrupted farms. | Enforced | 19 Sold past the insurance floorNo insurance guarantee on file |
A ladder rung's sell-by date prices the tranche on the calendar, not the market A price target alone is a wish, because a market that never touches it leaves the bushels unpriced at delivery. Every advisor here has a story about a client who would not sell at $4.60 in March and took $3.90 in October. | Time stops enforced | 29 Time stop passed |
A break-even older than six months is not trusted Six months spans a planting-to-harvest change in fertilizer, fuel and cash rent. A February break-even used to justify an August sale is a different farm's numbers. | 6 months | 132 Break-even out of dateBreak-even not from the books |
Price to the seasonal pace, within tolerance Being under-sold is only a problem when the market is paying. The tolerance is what stops the software chasing a client who is following the plan. | 5% either side | 32 Behind pace while profitable |
Know what is resting in the market, and know before it fills A fill a family did not expect is a conversation nobody wants to have afterwards, and an order that lapses does not fail loudly: the bushels simply stop being worked. | Near at $0.05, expiring at 14 days | 70 Order near its triggerOrder expiring |
Finish the sale. An open basis is a half-priced bushel With the basis unfixed the average price on a client's statement is an estimate rather than a number, and a family who believes they are 60% sold does not know their own average. | Chased past 60 days | 60 Basis left open |
Every bushel has a home before harvest Grain with nowhere to go gets sold at the harvest bid, which is the worst basis of the year by design. | Storage checked against unpriced bushels | 46 Short of storageDelivery period closing |
Storing is a decision, not a default Carry plus the expected basis gain has to beat what holding the grain costs. A client who has already paid for the bin believes storage is free, and it is not. | Netted per crop and per point | 27 Carry no longer pays |
Every client hears from somebody inside the cadence Nothing has to be wrong for a call to be worth making. That is the point of a cadence, and it is the first thing to slip when a book is over capacity. | Every 45 days | 51 Overdue for contact |
Every client has a plan to execute against Unpriced bushels with no ladder behind them are the default path to selling at harvest, and there is nothing for an order to fill against or a time stop to fire on. | A ladder on every live crop | 0 |
The instrument rule is stated and not enforced, and that is deliberate rather than an oversight. The desk does not put on anything carrying a margin call, but a client can arrive already holding futures or options, and the right behaviour is to report those clearly rather than to refuse to show them. They are drawn in watch wherever they appear. The signal list is where every enforced rule surfaces.
The seasonal pace curve
| Month | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Priced by end of | 5% | 15% | 30% | 45% | 60% | 65% | 70% | 72% | 75% | 80% | 85% | 90% |
The curve is deliberately behind the seasonal price peak rather than on it. Nobody prices the top, and a plan that tried to would leave a client unsold in every year the peak came early. It puts most of the crop away across the window instead, giving up the best price in exchange for never taking the worst one. Seasonality draws it against the price shape.
TODO: this curve is the desk's stated methodology and not a fitted one. Once there are several seasons of the desk's own fills in the database it should be measured against what actually paid rather than asserted. The same applies to the cushion, the staleness threshold and the cadence: every number on this page is a judgement that should become a measurement.
Nothing the software produces is a trade recommendation to a client. These rules govern what the desk will and will not put in front of a family, and a person makes every call.