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Hay market poker

Published on 05 March 2014

I despise poker. I’m not a poker-playing aficionado. In fact, I’d rather try to spell “aficionado” with one hand tied behind my back and spell-check turned off than play poker.

I don’t advocate the game, but I understand the rudiments; you risk something of value based on a blend of skill and luck. It’s a curious concept.

It fascinates me to think card players can play this game with any hope of winning, because in addition to the luck of the deal, you have to deal with another unknown – what cards the others are holding. That’s two strikes, neither of which is in your control.

Poker and coin flips are based on mathematical probability. If I flip a coin, I have a 50 percent probability that it will come up heads. If I flip it again, my chances won’t improve – it’s still 50-50. No matter how many times I flip the coin, my chances do not improve.

If I am dealt two suited cards, the probability that I will flop a flush is 118-to-1. (I had to look up “flop” on a website, and strain to remember what a flush was – that’s how poker-savvy I am.)

But it doesn’t take a lot of poker expertise to know that a 118-to-1 ratio is not something I’d risk even pocket change on. Who would, right? It’s a sucker’s bet. Yet understanding the probability, if I did play the game, would help me make a better decision.

The hay market is based on probabilities, too. We look at the probabilities – what drought pressures are anticipated, what China’s demand is going to look like, what growth is projected in Vietnam dairies, what new water regulations are imposed in Saudi Arabia and whether India’s market continues to be developed.

Then we factor in all of the weather forecasts, forage quantity on hand, water availability, projected yield and quality, transportation regulations and now program changes presented in the new farm bill.

Given that information, we can increase our odds for success, even in challenging years.

In order to increase the success of your forage probabilities, it requires an open and honest evaluation of your farm – your inputs, projections, challenges.

You must find the numbers; you must do the math. And you must not shrink from honesty. There is no “open sesame,” no magic wand, no lamp to be rubbed. It’s probabilities and it’s math.

In this issue, we’ve provided forage outlooks from several industry experts who provide information that should help increase your probabilities of success by increasing your knowledge of “the game.” We’ve included a nationwide forage statistics poster to help you evaluate your states and regions.

Whether flipping a coin or growing forage, the nature of the game doesn’t really change in that there will always be risk coupled with probability, but with honest evaluation we can weigh the probabilities and leverage them in our favor.

What we cannot afford to do is believe all coffee-shop talk and make decisions based on fear or misinformation.

Franklin Delano Roosevelt said at his 1933 inaugural address, “… the only thing we have to fear is fear itself …” and despite what your personal politics might be, that statement is more than just a well-turned phrase. It’s not just oratory. It’s an attitude.

Don’t feed the fear of an uncertain future. Control as many variables as you can to increase your probabilities, and put the rest in God’s hands.  FG

00_jaynes_lynn
Lynn Jaynes 
Editor
Progressive Forage Grower

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