Better Marketing Information but Human Emotions Still in Play

By Fred Evans – June 4, 2018


Two Sundays ago, I stopped in at a local convenience store and noticed the television was tuned to a Canadian all-news station.


The last provincial leaders’ debate had just ended and I asked the young clerk how it had gone. Her reply was that she had not paid attention to it but “as long as Ford did not win the election she would be happy.”


“Ford is just like Trump,” and we can’t have that in Ontario, she told me.


Driving home I gave some thought to the exchange. Here was a young person, about to vote for the first time in her life, and it appeared her selection was being driven not by a logical examination of the various candidates and their respective platforms, but rather by fear the province would be in dire straits with Ford at the helm.


Fear stronger than hope and greed

Fear is a strong motivator – more persuasive than hope and greed in guiding one’s actions. The political parties know this and focus their campaigns around convincing the voter that if elected, the other candidate will be bad for the province, in general, and to the individual specifically as he/she won’t get all the promised freebies.


The lure of getting something for nothing is strong but the fear of losing out on those promises is even stronger.


It reminded me of an old cartoon in my files:



At least 40 years old, the illustration here is very familiar to those of us involved in the grain marketing business, but it can be applied to politics as well. Focus on the expressions of the farmer as he rides out the price roller-coaster. How appropriate, especially the character riding the fear component.


During the hope phase, there will be opportunities to make sales on any price bounces that do occur. Here, one has confidence to make the sale as they have already captured the earlier higher values earlier. However, paralysis sets in for the producer who did not make the earlier sale and is waiting for a rebound back to original price peak.


Sadly, this is unlikely to happen.


Better marketing success through incremental sales approach

DePutter Publishing has always recommended the incremental sales approach to marketing, whereby portions of the crop are doled out over time as a means of trying to capture the best prices while at the same time avoiding the lows.


The worst marketing casualty is the individual who does nothing all year and then panics at or very near the bottom and sells out of desperation. Early in my career in the elevator business, in 1977, I witnessed a customer market two crops on the same day. He had stored his entire 1976 corn crop until storage terminated at the end of June.


At that time, he put the corn on a September basis contract which had to be priced at the end of August. It was now the end of August and futures were down again, as they had been for weeks. That morning he priced out the old crop and I gave him his cheque. After noon he returned, visibly upset, and announced he wished to forward sell his 1977 corn crop too. No amount of counselling on my part would sway his determination to sell. That was the low, as I recall, for the entire year.


Times change but human emotions don’t

In 1977, producers did not have the wealth of market information available that exists today. One had to rely on the radio noontime farm market report and its outdated news. As well, many had to overcome the fear of forward selling a crop that had not yet been produced.


We’ve come a long way. But various versions of greed, hope and fear are still in play.


Returning to the politics analogy, one can see the emotional similarities with grain marketing. Over the past number of weeks, the various parties have promised the moon to Ontario electors and cost, apparently, is unimportant. During the hope phase, the parties judge the impact of their promises on the electorate. As the election nears the fear phase kicks in as the parties ramp-up their attacks on their competition. The intention of scaring the voters, especially the uninformed ones, away from the competition is the only thing that matters now.


The success, or failure, of a party’s strategic campaign will be realized on voting night when the ballots are counted. Was the use of fear tactics able to sway enough people away from the competition?


The producer’s time line is much shorter. Generally, he/she has an 18-month window to market their crop. During this time, emotions will be buffeted by numerous events, some good and some bad.


If followed, the recommended incremental selling approach will allow the producer to ride out the periods when fear takes hold and capitalize on the good opportunities when they arise.


Fred Evans spent about 40 years in the futures and grain trading business. He now provides services as an analyst and commodity market researcher on a part-time basis for DePutter Publishing Ltd.