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Extending Our Reach – Training Agricultural Professionals to Facilitate and Teach Price Risk Management in a Marketing Group Setting
Bret Oelke and Bill Craig, University of Minnesota and Dale Carter, Agricultural Consultant
Extending Our Reach – Training Agricultural Professionals to Facilitate and Teach Price Risk Management in a Marketing Group Setting
Extending Our Reach……..
Objectives Understand the need to
expand access for producers
Recognize the U of M format
Learn the process used to replicate the University format
Outline the training and support provided to non-University facilitators
Price Risk Management Education Why the need?
Limited staff to manage and facilitate groups Increasing demand due to Minnesota Master
Marketer, Winning the Game and other marketing programs delivered by University Staff
Measurable financial impact on group participants (Texas A&M mature marketing group survey)
Sponsor requests
Fig. 5.3 Minnesota Marketing Clubs 2003 Survey- Adoption of Marketing Skills Skill Adoption Pre Marketing Club Post Marketing Club Percent Increase Marketing plan? 35% 92% 163% Written marketing plan? 11% 54% 391% Determine costs of production? 57% 84% 47% Profit and/or growth needs? 48% 73% 52% Fundamental Analysis? 58% 95% 64% Seasonal price information? 63% 97% 54% Technical analysis? 30% 76% 153%
Texas A&M Mature Marketing Group Survey
Texas A&M Mature Marketing Group Survey
Fig. 5.4 Minnesota Marketing Clubs 2003 Survey- Average Mastery Level on Scale of 1-7 (1=low) Pre Marketing Club Post Marketing Club Percent Increase Production risk management tools? 3.9 5.2 33% Marketing tools to manage price risk? 3.3 5.1 55% Hedging with futures? 3.2 4.9 53% Hedging with options? 2.9 4.7 62%
Texas A&M Mature Marketing Group Survey
Fig. 5.5 Economic Impact – Minnesota 2003 Marketing Club Survey Results
Total Impacts
Club members with impacts Average impact
per operation
Average - All Crops 155 $13,673
Average - All Livestock
28 $37,975
Average Per Operation
156 $20,401
Price Risk Management Education University of Minnesota marketing group
format Master Marketer curriculum used initially to
provide background to group participants On-going material developed by Regional
Extension Educators Regional Educators facilitate and teach regularly
along with guest speakers Fee based program (per session or per farm
annually)
Price Risk Management Education Meeting format
90 to 120 minutes 12 to 16 session per year Formal presentation first Research based (limit opinion and don’t “advise”) Informal discussion Have a reason to meet (not just to socialize) Benchmark marketing plans
Price Risk Management Education Market material used
Commodity futures prices for grains and livestock Energy futures Options Local prices USDA report information and summaries
Price Risk Management Education
Price Risk Management Education
Price Risk Management Education
Sale Increments
Amount Tool Price Default Date %
10,000 Bu. HTA or Futures 2.52$ 22-Mar-06 10.53%
10,000 Bu. HTA or Futures 2.61$ 12-Apr-06 10.53%
20,000 Bu. HTA or Futures 2.69$ 10-May-06 21.05%
20,000 Bu. HTA or Futures 2.79$ 24-May-06 21.05%
15,000 Bu. HTA or Futures 2.88$ 7-Jun-06 15.79%
10,000 Bu. HTA or Futures 2.97$ 21-Jun-06 10.53%
10,000 Bu. HTA or Futures 3.08$ 5-Jul-06 10.53%
95,000 Total Bu. 2.79$ Ave. $/Bu. 100.00%
Minimum acceptable price 2.52$ $/Bu.
Price Risk Management Education Training the Trainer
Minnesota Master Marketer Program
Participating in existing groups
Price Risk Management Education Supporting the Trainer
Provide localized presentations Benchmark marketing plans developed with group
participants tracked by facilitator Work with local sponsor to recruit participants Conference call and email support
Price Risk Management Education Sponsors
Local businesses and/or farm organizations Provide access to customers/members Support facilitator In some cases provide meeting space
Price Risk Management Education Other important issues
Facilitators should not have an “agenda” Need to have support of local Agricultural
Businesses and/or farm organizations Open communication and clear expectations of
participants, facilitators, and sponsoring organizations
Price Risk Management Education Thank you!
Bret Oelke - Regional Extension Educator, Agricultural Business Management
Bill Craig - Regional Extension Educator, Agricultural Business Management
