Facilitator’s Notes – Dice Game
AgVentures
Grain Marketing
Facilitator’s Notes
Dice Game
TIME ALLOWED: 35 minutes + 15 minutes per game
INTRODUCTION:
Approximately 35 minutes are needed for the introduction, instruction and the first round of the
game. Fifteen minutes per game is needed after that.
The purpose of this game is to get producers to think about marketing grain before the end of the
cropping season. During the course of a year the crop outlook can change several times, causing
the commodity price to move higher or lower. As a grain producer, one can quickly get caught
up in the emotion of the fluctuating market and forget about the reason to have a marketing plan.
The game is a simplified illustration of how a market outlook can change over the course of the
crop year. During the crop year, by rolling the dice, we can simulate changes in weather, which
in turn may or may not have an affect on the crop yield and harvest price of grain. Ultimately,
rolling the dice will determine the weather, yield and the final price for the crop produced.
Participants are asked at different times of the crop year whether or not they would like to sell
grain at select prices. The prices available are determined when participants roll dice.
This game is meant to be a fun activity where a “winning “ team is selected based on final
revenues generated from the grain marketed over the course of the year.
OBJECTIVE(S):
1. Observe the potential benefits of marketing at least some grain before the end of the
cropping season.
2. Recognize that the crop outlook can change several times during the year.
INSTRUCTIONS:
The following PowerPoint presentation will aid the facilitator with explaining the concept of a
normal distribution of patterns.
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Facilitator’s Notes – Dice Game
Slide 1
Start by asking each of the participants what the price of corn is today? Draw their attention to
the fact that between the participants, there is likely some variability in their estimated prices.
Some are quoting higher prices and some lower. Overall though, there will be an average price
that most participants will agree upon. The first slide illustrates the normal distribution of rolling
a set of two dice. The likelihood of rolling a combination of numbers that sums to 7 will occur
nearly 60% of the time whereas rolling two singles, or two sixes, occurs less than eight percent
of the time.
Slide 2
Although the historic monthly corn prices in Southwest Wisconsin does not fit a symmetric bell
shaped distribution curve like that of rolling dice, we do see a similar trend. We can see that the
most likely corn price will range between $2.40 and $2.59. At prices above or below that range,
the chance of the market offering that price decreases.
Slide 3
Monthly average December Corn Future prices follow about the same pattern. Again, the
possibility of corn ranging between $2.50 and $2.69 is greater than the other prices which
continue to decline in terms of occurrence.
Slide 4
As part of the game that we are about to play, we will assume that crop prices will follow a
normal distribution pattern. During exceptional growing weather, the most common price for the
crop determined by rolling a set of dice will be $2.00, with a range from $1.50 to $2.50.
Slide 5
During a normal crop year, the normal distribution maintains the same appearance but the prices
are shifted upward. In this case the most common price for the crop determined by rolling a set
of dice will be $2.30.
Slide 6
During a drought year, again the normal distribution maintains its appearance, however because
of the deficit of corn due to poor yields, the price has shifted upwards again. The most common
price in this instance would be $2.80 with a range from $2.30 to $3.40.
Slide 7
The previous slides illustrate how the commodity prices change with weather conditions. We
also need to now consider corn yield distribution. Yield, as indicated in bushels per acre also
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Facilitator’s Notes – Dice Game
generally follows a normal distribution pattern. During approximately 60% of the years, we
would expect a yield of 120 bushels per acre on this farm. During exceptional years, which
occur less than 10% of the time, we might capture 170 bushel yields. On the other hand, in poor
years we could expect yields as low as 70 bushels.
NOTE: These charts should be printed and used as a reference during the game. If technology is
available such as a PowerPoint system or overhead machine, the slides can be more easily seen
by the participants as they play the game.
GAME INSTRUCTIONS:
1- Divide the group into teams. Make sure each team has someone to keep track of how much
each team sells and the price they sell at.
2- Each team has 200 acres of corn and expects to achieve a yield of 120 bushels per acre.
3- Each team has three opportunities to market their crop:
January 15
May 15
Harvest on November 15
4- Players can accept forward cash contracts in January and May.
In January, you can price to receive $2.50 per bushel on:




No production
1/3 of expected production (8,000 bu.)
2/3 of expected production (16,000 bu)
All of expected production (24,000 bu)
In May, you can price:




No production
1/3 of expected production (8,000 bu.)
2/3 of expected production (16,000 bu)
All of expected production (24,000 bu)
Note: January + May cannot exceed 24,000 bushels.
Starting the game:
Play the game once per day over the three day period. Make it a fun activity for the participants.
Explain how the game works and let them contract for January on the first day. On the second
day, contract for the month of May. Finally, finish the marketing game on the final day of class.
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Facilitator’s Notes – Dice Game
It is a good idea to give a little prize to the team who has the highest final revenue. Another
alternative is to play the game three times (a growing season worth) over the course of the day
and have daily winners. The game can then be repeated during the next class. This will allow
participants multiple opportunities to observe fluctuations in prices and weather, and witness
how their marketing decisions affect their final revenue.
To Begin:
It is January 15, participants have the opportunity to forward contract grain at $2.50 per bushel.
The can lock in that price for none, 1/3, 2/3, or all of expected production.
Have the teams record how much was sold at that price.
Now assume it is May 15. Roll one dice to determine the weather for the planting season
(exceptional, normal or drought). A 1 or 2 is an exceptional planting season. A 3 or 4 results in
a normal price distribution. A 5 or 6 indicates a drought year. The forward contract price for
the month of May is the mean of the determined (by roll of the dice) cropping season. The price
is taken from the bar chart of the selected cropping distribution. For example, the forward
contract price for May when a 5 or 6 is rolled (drought) will be $2.80.
At this time, the teams can contract none, 1/3, 2/3, or all of the expected production at the offered
forward contracted price. But, the total amount contracted between January and May cannot
exceed 24,000 bushel.
Have members of each team record the amount contracted and the price at which they
contracted.
Move ahead to November. The dice are rolled twice in November. The first time they are rolled
to determine the actual market price of the grain. The second time they are rolled to determine
the final yield of the crop.
Role two dice to determine actual market price at harvest from the distribution identified in May.
The actual market price is determined by adding the total of the two dice together. The roll of
the dice corresponds with a bar on the predetermined distribution found in May. A 2 is the price
on the far left bar and a 12 will be the price on the farthest bar on the right. This will be the final
price for the crop year
Finally, roll two dice to determine the actual yield of for the crop year. The total of the 2 dice
will correspond with a bar on the Corn Yield Distribution chart. This will be the actual grain
yield for the crop year.
Make sure someone on each team is recording the action taken in November.
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Facilitator’s Notes – Dice Game
Determine final revenue for each team:
Final revenue is equal to:
 Amount contracted in January times $2.50 per bushel
 Plus, amount contracted in May times contracted price
 Plus, any un-priced corn times the harvest price
 MINUS the price of contracted grain which cannot be delivered plus an
additional 10 percent non-delivery penalty.
Explain to participants this same type of marketing can be done for their operation. Ask if there
are any similarities between the game and the real world. Throughout the marketing year,
reports are released speculating where prices are headed. As with the role of the dice, these
forecasts are subject to change. An important question to ask is what is the probability of the
price moving up or down.
The game can be modified in a variety of ways as the class progresses from day to day. For
example, in November a single dice can be rolled to determine what the cropping season was
actually like for the year (exceptional, normal or drought). With advanced classes, options or
other marketing strategies can be incorporated into the game. Use your imagination. Again,
modifications to the game provide additional learning opportunities and demonstrate risks that
producers face during the course of the year.
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