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 nonUniversity facilitators
Price Risk Management Education

Why the need?


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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
Texas A&M Mature Marketing Group
Survey
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
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
Average impact
Total Impacts
Club members with impacts
per operation
Average - All Crops
155
$13,673
Average - All
28
$37,975
Livestock
Average Per
156
$20,401
Operation
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






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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%
$
2.79
95,000 Total Bu.
Minimum acceptable price
$
2.52 $/Bu.
Ave. $/Bu.
100.00%
Price Risk Management Education

Training the Trainer


Minnesota Master
Marketer Program
Participating in existing
groups
Price Risk Management Education

Supporting the Trainer



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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
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Other important issues


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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
oelke002@umn.edu
Bill Craig - Regional Extension Educator,
Agricultural Business Management
craig030@umn.edu