4 - Evaluate market opportunities
Regularly evaluate market opportunities as feed supply, financial situation, or market prices change and select markets to maximise enterprise profit
Guidelines for regularly evaluating market opportunities
New markets are continually emerging and prices change frequently. Revisiting your decisions about preferred markets on a regular basis and the method and timing of sales, puts you in a good position to take up opportunities arising from changes in market specifications, market prices or selling options. Tools 7.01, 7.02 and 7.04 will assist you in evaluating market opportunities.
Regularly assess and develop new marketing options
Look for alternative marketing opportunities that may better match the range of product specifications you can supply. A particular market opportunity may justify an increase in inputs to the production system to enhance your capacity to deliver to specifications. In this case complete a partial budget to confirm the option and examine the risks. The MLA Cost of Production Calculator may also be a valuable aid when considering the costs of inputs versus the improved value of product.
Maintain key customer and supplier relationships
While looking into new market options, consider building alliances and developing long-term relationships with regular customers. If switching to an alternative selling system, ensure the ‘pros’ and ‘cons’ of a change are carefully thought out before a final decision is taken.
Forward contracts offer efficiency and consistency to some enterprises. A forward contract is a contractual agreement between a seller (producer) and a buyer (processor) to supply a given product at a future point in time for a given price. In some cases, the price is fixed, thereby reducing the producer’s exposure to a fall in market price.
What to measure and when
- Monitor the predicted net returns and best time of sale for each group of animals destined for the target market(s) and all potentially available buyers. This may need to be conducted frequently as sale groups approach the projected sale date or if the market prices are irregular.
- Market information is available from MLA, including the National Livestock Reporting Service (NLRS), which can assist in providing accurate and timely market data.