Logic-Based Grain Marketing

At AgPerspective, we follow the method of Logic-Based Grain Marketing.

Key Features Include:

  • Not Speculative - belief in Efficient Markets

  • Farmer Specific

  • Data-Centric - focused on Relevant Data

  • Use of data analytics to model risk (much like an insurance company models risk)

Efficient Markets

The efficient market theory states that prices reflect all information and consistent alpha generation is impossible.

Alpha (a) is a term used to describe a strategy’s (or strategist’s) ability to beat the market or gain an “edge.”

Farmer Specific

Marketing Strategy must account for the uniqueness of each farmer.

Examples of individual factors impacting marketing:

  • Financial metrics - balance sheet, breakeven, cash flow needs, etc.

  • Production history

  • Storage capabilities

  • Risk tolerance

Data-Centric

Relevant Data:

  • Breakeven

  • Type of insurance

  • Current hedge positions

  • Time of year

  • Probabilistic outcomes (derived via data science)

    Non-Relevant Data (difference between relevant and significant)

    Weather forecasts, USDA reports, Geopolitics, Expert predictions, etc.