The Missing Piece in Most Farm Hedging Plans

The latest episode of Hedge Heads features special guest Brett Oelke, founder of Innova Agra and a farm management coach. Brett joins Jon Prischmann to discuss why most grain marketing plans fail before they even start: a lack of foundational farm management and multi-generational planning.

The Foundation: Beyond the Grain Marketing Plan

Many producers jump straight to marketing without doing the necessary background work. Brett emphasizes that a successful hedge program requires more than just picking a price; it requires a deep dive into the "messy" side of farming:

• Multi-Generational Transfer: Focusing on transferring the decision-making and financial processes, not just the physical assets.

  
  

• True Cost of Production: Moving beyond university averages to calculate real machinery costs (loan/lease payments, repairs) and family living expenses.

  
  

• Lender Alignment: Getting the broker, coach, and banker on the same page. Brett often facilitates a separate marketing line of credit with automatic draws to ensure margin calls are handled without delay or friction.

  
  

Strategy Spotlight: The Corn/Wheat Relationship

With corn currently trading in a narrow, 17% range—one of the lowest since 1996—standard marketing has become difficult. Brett and Jon discussed a more creative approach using the historical price relationship between Chicago Wheat and Corn:

• The Norm: Historically, corn should be priced at roughly 75-76% of Chicago wheat.

  
  

• The Opportunity: When wheat is undervalued relative to corn, producers can look at selling December Wheat calls rather than corn calls.

  
  

• The Math: If a producer sells a $6.50 wheat call and is exercised at the "normal" relationship (76%), it effectively equates to $4.94 corn—a price that has only been seen one day since August 2023.

  
  

Looking Toward 2026/2027

As we enter what looks like an unforgiving environment, the team is already looking at deferred contracts:

• September/March Spreads: Brett is currently tracking the Spring Wheat calendar spread (September '26 under March '27), noting it is currently wider than the 31-cent norm, offering a low-risk entry point.

  
  

• The Power of Carry: By rolling a $4.70 December sale out to March and adding a 30-cent call, producers can potentially turn a $4.60 break-even into $4.80 cash corn.

  
  

• Adding "Dimes": The goal for the upcoming season is to find ways to add value multiple times—aiming for 30 cents of extra revenue outside of normal elevator channels.

  
  

Why the Elevator Isn't Enough

The "path of least resistance" at the elevator often costs producers 3 cents or more in fees and limits their flexibility. Elevators prioritize margin and volume, not the individual farmer’s profitability.

"Everything's a math problem. We look at data and patterns to find the optimal window, because if you're just a cash guy, it's going to be a rough run." — Brett Oelke.

Next Steps: Brett is currently finishing updated "Invis" budget sheets for 2026. If you'd like to see a sample of how these tailored plans look, or if you need to start the conversation with your banker, reach out to us at hedgeheadspod@gmail.com