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Marketing Risk Management in the Eastern Corn Belt: Basis Education and an Interactive Online Basis Tool

Nathanael Thompson

Summary

Increased price volatility, lower crop prices, and tight operating margins have increased the need for better marketing risk management skills. Although most crop producers are familiar with basis, the relationship between local cash and futures market prices, relatively few understand how to forecast basis and even fewer have access to historical basis data in their market region – 85% of the producers we interacted with did not have access to historical basis data. To fill this void, we developed the Purdue Center for Commercial Agriculture Crop Basis Tool, which provides producers in the eastern Corn Belt (Illinois, Indiana, Michigan, and Ohio) access to historical and contemporaneous basis data they can use to analyze trends and develop basis forecasts. The Crop Basis Tool garnered over 2,500 visits in just the first 9 months, and we have reached over 800 producers with programming related to this tool. In this session, we will describe the tool and how it can be incorporated into marketing risk management education and outlook programming, along with expected learning outcomes. Workshop-style programming will also be described, including specific examples of how educators can train producers to implement the information provided by the Crop Basis Tool into their marketing decisions.

Details

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