Larry Stalcup

February 1, 2013

3 Min Read

 

Grain marketing clubs come in all shapes and sizes. With so much money on the table, most farmers need all the information they get on making crop sales, trends that impact prices, whether China is still calling the shots or whether Texas feed yards will still pay $8 for corn.

According to stats from Texas A&M AgriLife Extension, knowledge learned through such clubs can pad your profits.

After coffee and doughnuts or sodas and cookies, participants chew on what corn and beans are doing that day, the past week and where they’re headed.

They also discuss different marketing strategies, what worked for them and what didn’t, and what direction they may take with futures, options or forward contracts. And tune up their marketing skills by pooling a few dollars to make an options trade, just to experience how the brokerage system functions.

Iowa State University (ISU) Extension & Outreach began forming ag marketing clubs in about 2000. Texas AgriLife and the University of Minnesota launched marketing clubs in the ‘90s as an offshoot of their Master Marketing program, and similar programs have been established elsewhere.

Steve Amosson, AgriLife Extension economist, says Master Marketer graduates started about 70 Texas marketing clubs. They’ve helped producers increase their total revenue, he says.

AgriLife surveys of graduates 2½ years after graduation show that growers have increased their annual receipts by more than $34,800 annually by putting their new knowledge to use, Amosson says. Growers who participate in marketing clubs see more than a $12,300 improvement in return on average, additional AgriLife surveys show.

“Risk management is critical, and these are programs that can help producers improve their marketing skills,” Amosson says.

In Story County, Iowa, marketing club members traded a fictitious 50,000 bu. of corn and 20,000 bu. of soybeans over four months ending in March. At each meeting, participants reviewed market conditions and trends and studied marketing guidelines. Most were producers, plus farm management companies, banks and others, says Alison Boelman, Story County Extension coordinator, who managed a group of about 30 monthly from November 2011 through March 2012.

Farmers played a simulated marketing game, the ‘Iowa Commodity Challenge,’ coordinated by ISU Extension & Outreach economists and Iowa Farm Bureau. “It was a good learning experience,” Boelman says. “We also had ISU Climatologist Elwynn Taylor as a speaker. Marketing clubs provide a great forum for producers and others in agribusiness to learn.”

Mary Clancy coordinates the Ogden Marketing Group in Boone, Iowa. It’s about 10 years old. “We’re discussing revenue protection decisions this February and crop and market outlook in March,” she says, adding that meetings are normally held post-harvest up to near planting time. “We also have a summer presentation on current subjects.”

Among the longest running clubs is the Adams County (Nebraska) Marketing Club. “We’ve been going 30 years,” says Mark Keiser, president and ag lender, Adam County Bank in Kenesaw, Neb.

“We meet at our bank and have about 15 members at every meeting. We have quite a few second-generation farmers. It’s been a great program for us.”

Keiser says it’s not all marketing oriented. Everything from fracking to social security has been discussed. “It’s about 75% social and 25% beneficial to a farmer’s business,” he says. “So it’s not all what about corn is doing and what beans are doing. But as long as you can sift one thing out every two weeks it’s worth coming.”

Keiser says the club is recruiting younger members. It could be a club that pays extra dividends, over and above coffee and doughnuts.

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