Mark-to-Marketing Your Corn: A $111,750 Loss and a Five-Fix

A 1,500-acre Minnesota corn operation projecting 200 bushels per acre at $4.62 futures faces an estimated loss of $111,750 — and every 25-cent price drop adds another $75,000 to that hole. That's the core of a five-step revenue management framework laid out by John Ohman of Heartland Commodities & Securities on November 12, 2026, arguing growers should market revenue, not bushels.

Most consultants, Ohman writes, recommend selling X percent of the crop at certain price levels — a split between harvest sales and grain stored into 2027. The problem? Nowhere in that scenario does the farmer know what revenue actually lands. "What if instead of looking at bushels, you marketed from a revenue perspective?" he asks.

What does mark-to-market change for growers?

Mark-to-market (MTM) values anticipated production at current prices. The assumption: if the market holds from today until the last kernel sells, what's your revenue? Ohman builds his example on the University of Minnesota's Southern Corn Budget for 2026 — 1,500 acres, 200 bpa average yield based on actual production history, and per-acre expenses of $858.

The five steps:

• Benchmark against December corn futures
• Estimate current crop value via MTM — the $111,750 loss at $4.62
• Run price-shock analysis: each 25-cent erosion costs $75,000
• Price bushels with cash forwards and hedge-to-arrive contracts at the local elevator
• Manage unpriced bushels with options

The pivotal question, Ohman says, isn't what you believe the market will do. It's whether you can live with the price if it happens. Answer yes, and "you have just made your risk management decision, which borders on speculation." Answer no, and real risk management starts.

How do the option hedges model out?

Set the maximum acceptable loss at $200,000. Ohman models put options at three strike prices against that cap. Results: if futures drop to $4.12 by November 15, the projected loss comes in at $200,055 versus $261,750 unhedged. Not pretty, but inside the target.

Timing matters as much as price. On September 15 at $4.12, the model shows roughly $13,000 of time premium still left in the options; by November 15, near expiration, that time value is essentially gone.

Many farmers try options once, lose money, and quit — usually, Ohman argues, because they bought without understanding the impact on the underlying revenue picture. Hedges don't have to run to expiration. MTM valuation tracks how revenue shifts as markets move and tells the grower whether to maintain, roll up, roll down, or roll out the position.

What about cash, banks, and taxes?

• No cash for options? A lender carrying the operating loan may extend a marketing line of credit — Ohman advises checking restrictions with your banker.
• Reconcile every option hedge to crop year and crop type, matched against futures commission merchant statements.
• Expect a gap between tax treatment and risk management treatment — cash versus accrual. MTM reports generate revenue figures on the accrued option asset.

Ohman calls revenue management "a fundamental change in old-school grain marketing" — a process growers will run every crop year going forward. His disclaimer is blunt: futures trading carries significant loss risk and past performance doesn't predict future results. As 2026 crop decisions stretch into 2027 storage, the framework suggests growers will spend less time guessing price direction and more time pricing the losses they can't absorb.