Why Would I Ever Hire a Market Coach Again?

What I Learned in My Conversation with Derek Squair

Derek Squair has been coaching and collaborating with my brother Terry as a "market coach" for over a decade and a half.

Prior to having him on the show, I gave the ever brilliant Twitterverse the opportunity to offer the questions they would most like answered by a market coach. You can read the check out the Q and A here.

Of all the fascinating queries that were posted, one kept resonating with me.

"Why would anyone ever pay for your services again?"

Derek had a great response to this question, which I will share at the end of this article.

BUT my single greatest takeaway from this conversation and farmer's questions was the problem that a market coach is ACTUALLY solving for a producer.

I realized the interview that I never even asked him what prices were going to be in 2022. It's because the function of a market coach in the case of Derek and my brother is to manage risk and optimize opportunities regardless of market activity.

What exactly does Derek help Terry with?

THE BUSINESS OF FARMING ...

"Budget straight off the bat. We're looking at cashflow, we're looking at return on investment, and that's where the cost of production is important, is the return on investment side. We're really looking at "green markets" and looking for the top revenue. We're there to optimize and to make sure we are managing risk and reward.

This year is a perfect example of that. There is risk in forward contracting. We need to manage that risk constantly, year round. A lot of people don't realize that. We are managing risk as well, and by some of the contracts that we have with act of God clauses, where we're managing risk. We want to make sure that we are optimizing not always maximizing by putting yourself at huge risk, but optimizing and making sure that the farm is looked after. We're really managing cashflow down the road as well, to make sure that it has operating cashflow. So it's not just about hitting the high of the market every time, every month. It's a matter of having hit the highs of the market, but also making sure that we're not at risk and we have significant cashflow coming in and we have delivery and storage opportunities.

Terry and I get into all the logistics around the farm as well, the drying and the cleaning and the binning. We are trying to get away from hauling grain at minus 40 and things like that. We manage all that. It's the business of farming. It's not just grain marketing, it's everything that goes with what's going on."

BEING PART OF THE ADVISORY FOR THE FARM ...

"There's big difference between people who have a network of support and everybody that's on their own.

You think about family farms and what the family farm even 10 or 15 years ago. It's a one man show, right? You got a general manager or CEO, whatever you want to call that guy, that's making all those decisions. Now how many dollars are involved in those decisions? It's multi-millions. It's a big corporation. For us to not act like a corporation ... it's strange when you think about that. How many dollars are involved, and how many big decisions are involved?If you look at a corporation you've got an advisory board of directors, you've got senior management, you've got middle management, you've got junior management. You've got a lot of those people that are helping you with those decisions. I think that's what Terry is doing. That's what the big farms do well, they'v gone to that next level. It's more than putting seeds in the ground and taking it off in the fall. It's all the business decisions of land, finances, rent to own or lease, human resources and all those decisions that come with running a big operation, it's ongoing.

The good farmers are really striving to be better and bringing in good people to help them make good decisions."

AND NEW MARKET OPPORTUNITIES ...

"Terry's going along down that road, working on regenerative ag and experimenting with it. On the soil side, he's doing those things that make sure that it's a financially viable and good for the soil. That's going to be the new piece. It's not just about organics or the food quality, but where it came from. There's a lot of ESG out there today ... "environmentally social governance". A lot of buyers ... I'll use General Mills ... they want to know that the soil is in good shape and that you didn't use high salt phosphate, that you're using low salt phosphate, or you're using NERP protocols for nitrous oxide, those types of things. They want to know those things because their customers want to know those things. That's where sustainable and regenerative is going to go. We're going to have get away from using those words and have more of a program that says ... "if you did this and this to your crop, you will get X. And if you did this and you fall into this category, you'll get Y." We need to define that as an industry and not just talk about sustainability and regenerative and organic for that matter but define it and track it. Have a lot of the blockchain that has quality control all the way through, right?

From producer to elevator, to processor and so on. They have quality control checks in there all the way through to make sure that product is what it says it is. You don't have that in the food industry today. And I think that's right. "

So by now I hope that your imagination has been opened to what is possible with a good coach. Let's let Derek have the final word on the original question "Why would I ever hire you again?"

"It's about risk reward. We're very careful about risk and not only maximizing revenue, but optimizing and making sure that we're not hanging our butts out there and it's a long-term deal. You might get stung on a year like this, but if you look at the history of the last 15 years, again, it's about building equity and not getting your ass out there too far. It's about just hitting doubles and triples and not swinging for the fences. We should?probably should have asked Terry why he continues. Obviously there's been a lot of great long-term value there. Back to the original thesis of our conversation about coaching, sometimes even if a wrong decision is made, just making it with others is far better than making a wrong decision on your own."

You can catch Derek's episode and all of the interviews I have done over the years on growingthefuturepodcast.ca, or wherever you find podcasts! Thanks Derek for an enlightening conversation as always!