Developing a Marketing Plan
Stan Bevers, Mark Waller, Steve Amosson and Dean McCorkle*
It is essential for an agricultural producer to have a written marketing plan.
Developing a good marketing plan will help you identify and quantify costs, set
price goals, determine potential price outlook, examine production and price risk,
and develop a strategy for marketing your crop.
While producers have traditionally done a good job of producing, they have
often neglected marketing. In the past, farm loan programs and deficiency pay-
ments allowed producers to neglect or ignore the marketing side of their business-
es. Now, with the possible elimination of farm programs and increased volatility
in the markets, producers will have the right and the obligation to determine their
own financial security. In this more uncertain and risky future, failing to plan
may be the same as planning to fail.
Importance of a Written Plan
In any business you must have a set of goals and objectives. A marketing plan
is a road map to work from. It helps identify where we are going and how we
are going to get there. Each marketing year we encounter has some similarity to
previous years, but we are still headed someplace we have never been before. We
need that map to help us maintain perspective and stay on course.
The marketing plan needs to be written down. A plan not written down is only
a dream we hope will come true. The plan must also be dynamic. As external
market factors change, the marketing plan may need to be adjusted. Having a
written plan provides discipline and is a good way to check your logic or the
accuracy of your thought process after the year has ended. By putting the plan in
writing, and sharing it with your spouse, partners, etc., you will have a reminder
that you had committed to follow a specific plan of action (for example, selling a
certain percent of the crop pre-harvest if prices reached (x) percent over your cost
of production). Writing down both the original plan and the changes allows you to
analyze your decisions and thought processes later. In this way, you can not only
identify what you did correctly, but more importantly, you can determine where
your analysis, strategies, or discipline have room for improvement. This is one of
the most critical reasons for having a written plan. You can not fix a mistake
until you know what it is, and without a written record, it may be diffi-
cult to identify what really went wrong.
Once you get the various parts of the plan put together, you
can start conducting what if or sensitivity analysis. Since
you know the future is uncertain, you may want to examine
different possible price and yield scenarios and see how your
strategies perform. You can also use the plan to help you
determine what you need to do in the worst case scenario.
This is extremely important, because you can not afford to let
one big mistake put you out of business.
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RM3-3.0
4-98
*Assistant Professor and Extension Economist; Associate Professor and Extension Economist; Professor and
Extension Economist; and Extension Program Specialist-Risk Management, The Texas A&M University System.
