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Women Marketing Grain Series

Ed Kordick and Steven Johnson

Summary

Farms have experienced multiple years of low crop prices that have resulted in tight profit margins and cash flow constraints. Improved marketing and risk management can often make the difference as to whether the operation is profitable. Women can help determine the cost of production and storage costs. They can then utilize a variety of crop marketing strategies and tools such as forward cash contracts, futures and options contracts and the use of crop insurance. Women can help the farm operation stay on track for long-term marketing success.
Iowa State University Extension developed a Women Marketing Grain Series along with a Course Curriculum. Participants meet in a computer lab setting to access online decision tools and to develop a marketing plan. Classes are offered over 4 weeks with 3-hour sessions.
Course Curriculum
1) Identifying crop prices and marketing costs
• Sources of futures and cash market prices
• Basis
• Futures carry
• Costs of storage
2) Understanding price movements
• Crop marketing terms
• Market fundamentals of supply and demand
• Technical chart signals
• Seasonal price trends for futures prices and basis
3) Utilizing a variety of crop marketing tools including
• Spot cash sales
• Forward contracts
• Hedge-to-arrive contracts
• Futures hedging
• Futures options (puts and calls)
4) Developing a crop marketing plan with price, time, and financial goals in mind
Outcomes

A post-course evaluation was completed by 40 respondents that indicated:
• 100% knew where to find cash prices for marketing corn and soybeans
• 100% found significance of knowing local basis quotes
• 100% knew the importance of seasonal futures and basis trends
• 100% knew how forward cash contracts are used to price grain delivery ahead for delivery
• 100% knew how futures contracts reduce price risk
• 100% knew the difference between put and call option contracts
• 100% knew how crop insurance is used to reduce production and price risks
• 100% knew how to estimate their profit margin (income over expenses)
• 97% knew how marketing fundamentals of supply and demand influence the cash price offered
• 97% knew that hedging served as a substitute for a cash transaction that will occur later
• 97% knew why hedge-to-arrive contracts are used
• 97% knew their actual storage costs
• 92% knew there actual costs of production for corn and soybeans.

Details

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