Extending Our Reach – Training Agricultural Professionals to Facilitate and Teach Price Risk Management in a Marketing Group Setting Bret Oelke and Bill.

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

[email protected]

Bill Craig - Regional Extension Educator, Agricultural Business Management

[email protected]