With pricing volatility shaped by forces well beyond the farm gate, selling grain has become one of the most influential risk decisions a farming business can make. Profitability isn’t locked in at harvest; it is protected, or lost, at the point of sale. In dry seasons, that protection becomes even more critical as grain marketing decisions can significantly influence a business’s ability to remain profitable when production drops.
Prices are sitting lower than the peaks of the past few seasons. That can create pressure and uncertainty about when to sell and how to manage cash flow. Fortunately, many growers across the north west have invested heavily in improved on farm storage in recent years and bulk handlers now have more flexible warehouse options. As such, storage is no longer just a logistics tool, it has become a strategic marketing asset that buys time and improves decision power, particularly in tight years.
The GRDC’s RiskWi$e initiative, led nationally by CSIRO with BCG leading the Victorian Action Research Group, emphasises that the best business decisions are those made with intention rather than reaction. In grain marketing, this means shifting away from trying to pick “the top of the market” and instead taking deliberate steps to manage downside risk while preserving opportunity. Rather than trying to outsmart the market, it is important to actively manage exposure to it. Every marketing decision carries a different type of risk. Production uncertainty affects confidence in forward contracting. Price risk is the one most growers feel strongly. Global and local news headlines form constant reminders of the forces beyond the farm gate. Cashflow needs can apply pressure, especially in challenging seasons. Storage and logistics determine whether grain can be held to pursue rallies or must move quickly. And of course, counter party risk underpins trust by knowing who you are selling to, and under what terms.
Understanding these exposures helps growers tailor a plan that suits their financial situation and appetite for risk. A grower with high confidence in production and cashflow obligations may choose to lock in a portion early, securing a known margin. A business with flexible finances and new storage infrastructure can structure staged sales timed to local demand and basis opportunities. There is no single right approach, only the one that reduces vulnerability. A structured framework supports better decisions. Instead of asking, “is the market going up or down?”, the stronger question is “what price secures a profit?” The shift from prediction to protection embeds a RiskWi$e, system 2 discipline of linking grain pricing back to breakeven and margin goals, committing volumes that match production confidence, and spreading decisions through time to reduce regret. It’s easy to dwell on the rally that got away or the contract that felt too early, but risk management isn’t scored on whether the very top price was hit, rather it’s judged by the business outcomes over time, reducing the impact of poor markets and building financial buffers that help weather dry years and reinvest in the future.
Through BCG’s role as the north west node of the Victoria Drought Resilience Adoption and Innovation Hub, we know that dry seasons don’t just reduce production, they compress decision windows and often amplify the consequences of timing. A drought resilient business can continue operating confidently even with fewer tonnes in the program. When the marketing plan secures cashflow ahead of key financial pinch points, when storage allows flexibility and when a diverse mix of buyers and pricing tools spreads exposure, the business is less vulnerable to the compounding pressures that come with drought.
As growers approach the 2025 harvest and plan for 2026, keeping a close eye on breakeven levels and setting profitability triggers can help maintain momentum, even in softer markets. Where storage exists, monitoring basis changes and local demand can create timely opportunities. Reviewing contract terms early reduces unexpected risk once grain is ready to move. Every now and then, taking time to reflect on what worked and what didn’t help sharpen the marketing approach over future years.
The most successful businesses are those that treat pricing decisions with the same planning discipline used in agronomy. By managing exposure, protecting cashflow and spreading risk, growers build a buffer against both market volatility and seasonal variability. Risk management allows growers to tilt the scales of risk reward in their favour.
This event is supported by the Victoria Drought Resilience Adoption & Innovation Hub through funding from the Australian Government’s Future Drought Fund.
Farm investment strategies: A case study from the Wimmera and southern Mallee
