ECON 337:

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ECON 337 Agricultural Marketing

Chad Hart Associate Professor chart_at_iastate.edu 51
5-294-9911
Lee Schulz Assistant Professor lschulz_at_iastate.edu
515-294-3356
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Dec. Corn Futures
Source CBOT, Futures Price for 2nd Friday of the
month
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Dec. Corn Futures
Source CBOT, Futures Price for 2nd Friday of the
month
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Basis
Harvest basis from December corn futures for
average cash prices for Iowa corn on the 2nd
Friday of October, in /bushel.
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Marketing Types

• Harvest
• Averaging
• Price Target
• Time and Price
• Extended Time and Price

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Marketing Types

• Harvest
• Takes the harvest price for 100 of their grain

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Average Price Captured
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Marketing Types

• Averaging
• Sells 10 of their grain via futures each month
  January-July
• Sells the remaining 30 at harvest
• Sets basis at harvest

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Dec. Corn Futures
Source CBOT, Futures Price for 2nd Friday of the
month
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Average Price Captured
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Marketing Types

• Price Target
• Sells 25 of grain via futures when futures price
  gt production cost
• Sells 25 when futures gt costs 0.25
• Sells 25 when futures gt costs 0.50
• Sells remaining 25 at harvest
• Sets basis at harvest
• Defaults to harvest sales when price objectives
  are not reached
• Will start selling in the November before planting

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Costs of Production
Source Iowa State University Extension, Dr.
Michael Duffy
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Dec. Corn Futures
Source CBOT, Futures Price for 2nd Friday of the
month
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Average Price Captured
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Marketing Types

• Time and Price
• Sell 25 in March
• Sell 25 in April
• Sell 25 in May
• Sell 25 at harvest
• Sets basis at harvest
• Only make March-May sales if futures prices gt
  production costs
• Defaults to harvest sales if price objectives are
  not reached

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Dec. Corn Futures
Source CBOT, Futures Price for 2nd Friday of the
month
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Average Price Captured
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Marketing Types

• Extended Time and Price
• Sell 25 in March or when futures prices gt
  production costs
• Sell 25 in April or when futures prices gt costs
  0.25
• Sell 25 in May or when futures prices gt costs
  0.50
• Only make March-May sales if futures prices gt
  costs
• Sell remaining crop at harvest
• Sets basis at harvest
• Defaults to harvest sales if price objectives are
  not reached

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Dec. Corn Futures
Source CBOT, Futures Price for 2nd Friday of the
month
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Average Price Captured
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Lowest Average
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Highest Average
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Longer History
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• Class web site
• http//www.econ.iastate.edu/chart/Classes/econ337
  /Spring2013/
• Have a great weekend.