Agricultural Marketing ECON 337: Agricultural Marketing Chad Hart Associate Professor chart@iastate.edu 515-294-9911 1

Dec. Corn Futures Source: CBOT, Futures Price for 2nd Friday of the month

Dec. Corn Futures Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct 2000 2.34 2.28 2.49 2.52 2.53 2.64 2.40 1.94 1.87 1.96 2.08 2001 2.54 2.45 2.47 2.16 2.37 2.24 2.09 2002 2.46 2.39 2.31 2.30 2.19 2.22 2.26 2.33 2.62 2.76 2003 2.41 2.38 2.50 2.42 2.11 2.14 2004 2.48 2.81 2.95 3.11 2.85 2.80 2.07 2005 2.29 2.04 2006 2.43 2.57 2.63 2.71 2.82 2.68 2.77 3.15 2007 3.45 3.50 3.95 3.99 4.08 3.75 3.92 3.69 3.51 3.49 2008 4.32 4.51 5.13 5.30 5.75 6.04 6.50 7.65 6.29 5.18 5.63 4.03 2009 4.43 4.20 4.54 4.06 4.18 4.07 4.40 4.48 3.32 3.28 3.20 3.72 2010 4.37 4.38 3.97 3.94 3.80 3.71 4.27 4.78 2011 5.09 5.29 5.71 6.18 5.78 6.53 6.27 7.13 6.37 7.15 7.37 6.40 2012 5.74 5.52 5.55 5.60 5.37 5.05 5.44 7.40 8.09 7.82 7.51 2013 6.30 6.28 5.77 5.47 5.50 5.33 4.53 4.59 4.33 2014 4.69 4.58 4.60 4.87 4.99 3.79 3.64 3.39 3.34 2015 4.24 4.22 4.05 3.78 3.70 4.31 3.76 3.87 3.83 2016 3.88 3.96 3.85 3.82 3.98 3.63 3.33 3.41 3.54 2017 3.89 3.86 3.90 3.57 Source: CBOT, Futures Price for 2nd Friday of the month

Basis Basis 2000 -0.42 2001 -0.40 2002 -0.25 2003 -0.26 2004 -0.34 2005 -0.56 2006 -0.46 2007 -0.49 2008 2009 2010 -0.59 2011 -0.30 2012 -0.09 2013 -0.03 2014 -0.38 2015 -0.37 2016 -0.44 2017 -0.48 Harvest basis from December corn futures for average cash prices for Iowa corn on the 2nd Friday of October, in $/bushel.

Marketing Types Harvest Averaging Price Target Time and Price Extended Time and Price

Marketing Types Harvest Takes the harvest price for 100% of their grain

Average Price Captured Harvest 2000 1.66 2001 1.69 2002 2.29 2003 1.88 2004 1.73 2005 1.48 2006 2.69 2007 3.02 2008 3.69 2009 3.47 2010 5.04 2011 6.10 2012 7.42 2013 4.30 2014 2.96 2015 3.46 2016 3.10 2017 Average 3.28 Min Max

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

Dec. Corn Futures Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct 2000 2.34 2.28 2.49 2.52 2.53 2.64 2.40 1.94 1.87 1.96 2.08 2001 2.54 2.45 2.47 2.16 2.37 2.24 2.09 2002 2.46 2.39 2.31 2.30 2.19 2.22 2.26 2.33 2.62 2.76 2003 2.41 2.38 2.50 2.42 2.11 2.14 2004 2.48 2.81 2.95 3.11 2.85 2.80 2.07 2005 2.29 2.04 2006 2.43 2.57 2.63 2.71 2.82 2.68 2.77 3.15 2007 3.45 3.50 3.95 3.99 4.08 3.75 3.92 3.69 3.51 3.49 2008 4.32 4.51 5.13 5.30 5.75 6.04 6.50 7.65 6.29 5.18 5.63 4.03 2009 4.43 4.20 4.54 4.06 4.18 4.07 4.40 4.48 3.32 3.28 3.20 3.72 2010 4.37 4.38 3.97 3.94 3.80 3.71 4.27 4.78 2011 5.09 5.29 5.71 6.18 5.78 6.53 6.27 7.13 6.37 7.15 7.37 6.40 2012 5.74 5.52 5.55 5.60 5.37 5.05 5.44 7.40 8.09 7.82 7.51 2013 6.30 6.28 5.77 5.47 5.50 5.33 4.53 4.59 4.33 2014 4.69 4.58 4.60 4.87 4.99 3.79 3.64 3.39 3.34 2015 4.24 4.22 4.05 3.78 3.70 4.31 3.76 3.87 3.83 2016 3.88 3.96 3.85 3.82 3.98 3.63 3.33 3.41 3.54 2017 3.89 3.86 3.90 3.57 Source: CBOT, Futures Price for 2nd Friday of the month

Average Price Captured Harvest Averaging 2000 1.66 1.91 2001 1.69 1.87 2002 2.29 2.11 2003 1.88 2.05 2004 1.73 2.24 2005 1.48 2006 2.69 2.35 2007 3.02 3.27 2008 3.69 5.13 2009 3.47 3.77 2010 5.04 3.84 2011 6.10 6.02 2012 7.42 6.17 2013 4.30 5.08 2014 2.96 3.85 2015 3.46 3.61 2016 3.10 3.34 2017 3.31 Average 3.28 3.42 Min Max

Marketing Types Price Target Sells 25% of grain via futures when futures price > production cost Sells 25% when futures > costs + $0.25 Sells 25% when futures > 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

Costs of Production Cost Cost + 0.25 Cost + 0.50 2000 2.43 2.68 2.93 2001 2.56 2.81 3.06 2002 2.55 2.80 3.05 2003 2.42 2.67 2.92 2004 2.58 2.83 3.08 2005 2.79 3.04 3.29 2006 2.86 3.11 3.36 2007 3.54 2008 3.63 3.88 4.13 2009 4.43 4.68 4.93 2010 3.48 3.73 3.98 2011 3.99 4.24 4.49 2012 4.40 4.65 4.90 2013 4.46 4.71 4.96 2014 2015 4.37 4.62 4.87 2016 4.11 4.36 4.61 2017 3.62 3.87 4.12 Source: Iowa State University Extension

Dec. Corn Futures Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct 2000 2.34 2.28 2.49 2.52 2.53 2.64 2.40 1.94 1.87 1.96 2.08 2001 2.54 2.45 2.47 2.16 2.37 2.24 2.09 2002 2.46 2.39 2.31 2.30 2.19 2.22 2.26 2.33 2.62 2.76 2003 2.41 2.38 2.50 2.42 2.11 2.14 2004 2.48 2.81 2.95 3.11 2.85 2.80 2.07 2005 2.29 2.04 2006 2.43 2.57 2.63 2.71 2.82 2.68 2.77 3.15 2007 3.45 3.50 3.95 3.99 4.08 3.75 3.92 3.69 3.51 3.49 2008 4.32 4.51 5.13 5.30 5.75 6.04 6.50 7.65 6.29 5.18 5.63 4.03 2009 4.43 4.20 4.54 4.06 4.18 4.07 4.40 4.48 3.32 3.28 3.20 3.72 2010 4.37 4.38 3.97 3.94 3.80 3.71 4.27 4.78 2011 5.09 5.29 5.71 6.18 5.78 6.53 6.27 7.13 6.37 7.15 7.37 6.40 2012 5.74 5.52 5.55 5.60 5.37 5.05 5.44 7.40 8.09 7.82 7.51 2013 6.30 6.28 5.77 5.47 5.50 5.33 4.53 4.59 4.33 2014 4.69 4.58 4.60 4.87 4.99 3.79 3.64 3.39 3.34 2015 4.24 4.22 4.05 3.78 3.70 4.31 3.76 3.87 3.83 2016 3.88 3.96 3.85 3.82 3.98 3.63 3.33 3.41 3.54 2017 3.89 3.86 3.90 3.57 Source: CBOT, Futures Price for 2nd Friday of the month

Average Price Captured Harvest Averaging Price Target 2000 1.66 1.91 1.76 2001 1.69 1.87 2002 2.29 2.11 2.31 2003 1.88 2.05 1.96 2004 1.73 2.24 2.40 2005 1.48 2006 2.69 2.35 2007 3.02 3.27 3.11 2008 3.69 5.13 4.16 2009 3.47 3.77 3.68 2010 5.04 3.84 3.87 2011 6.10 6.02 5.25 2012 7.42 6.17 5.97 2013 4.30 5.08 5.63 2014 2.96 3.85 4.00 2015 3.46 3.61 2016 3.10 3.34 3.29 2017 3.31 3.19 Average 3.28 3.42 3.33 Min Max

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 > production costs Defaults to harvest sales if price objectives are not reached

Dec. Corn Futures Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct 2000 2.34 2.28 2.49 2.52 2.53 2.64 2.40 1.94 1.87 1.96 2.08 2001 2.54 2.45 2.47 2.16 2.37 2.24 2.09 2002 2.46 2.39 2.31 2.30 2.19 2.22 2.26 2.33 2.62 2.76 2003 2.41 2.38 2.50 2.42 2.11 2.14 2004 2.48 2.81 2.95 3.11 2.85 2.80 2.07 2005 2.29 2.04 2006 2.43 2.57 2.63 2.71 2.82 2.68 2.77 3.15 2007 3.45 3.50 3.95 3.99 4.08 3.75 3.92 3.69 3.51 3.49 2008 4.32 4.51 5.13 5.30 5.75 6.04 6.50 7.65 6.29 5.18 5.63 4.03 2009 4.43 4.20 4.54 4.06 4.18 4.07 4.40 4.48 3.32 3.28 3.20 3.72 2010 4.37 4.38 3.97 3.94 3.80 3.71 4.27 4.78 2011 5.09 5.29 5.71 6.18 5.78 6.53 6.27 7.13 6.37 7.15 7.37 6.40 2012 5.74 5.52 5.55 5.60 5.37 5.05 5.44 7.40 8.09 7.82 7.51 2013 6.30 6.28 5.77 5.47 5.50 5.33 4.53 4.59 4.33 2014 4.69 4.58 4.60 4.87 4.99 3.79 3.64 3.39 3.34 2015 4.24 4.22 4.05 3.78 3.70 4.31 3.76 3.87 3.83 2016 3.88 3.96 3.85 3.82 3.98 3.63 3.33 3.41 3.54 2017 3.89 3.86 3.90 3.57 Source: CBOT, Futures Price for 2nd Friday of the month

Average Price Captured Harvest Averaging Price Target Time & Price 2000 1.66 1.91 1.76 2.02 2001 1.69 1.87 2002 2.29 2.11 2.31 2003 1.88 2.05 1.96 2004 1.73 2.24 2.40 2.41 2005 1.48 2006 2.69 2.35 2007 3.02 3.27 3.11 3.28 2008 3.69 5.13 4.16 5.24 2009 3.47 3.77 3.68 2010 5.04 3.84 3.87 3.74 2011 6.10 6.02 5.25 5.94 2012 7.42 6.17 5.97 5.80 2013 4.30 5.08 5.63 5.12 2014 2.96 3.85 4.00 4.17 2015 3.46 3.61 2016 3.10 3.34 3.29 2017 3.31 3.19 Average 3.42 3.33 3.39 Min Max

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

Dec. Corn Futures Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct 2000 2.34 2.28 2.49 2.52 2.53 2.64 2.40 1.94 1.87 1.96 2.08 2001 2.54 2.45 2.47 2.16 2.37 2.24 2.09 2002 2.46 2.39 2.31 2.30 2.19 2.22 2.26 2.33 2.62 2.76 2003 2.41 2.38 2.50 2.42 2.11 2.14 2004 2.48 2.81 2.95 3.11 2.85 2.80 2.07 2005 2.29 2.04 2006 2.43 2.57 2.63 2.71 2.82 2.68 2.77 3.15 2007 3.45 3.50 3.95 3.99 4.08 3.75 3.92 3.69 3.51 3.49 2008 4.32 4.51 5.13 5.30 5.75 6.04 6.50 7.65 6.29 5.18 5.63 4.03 2009 4.43 4.20 4.54 4.06 4.18 4.07 4.40 4.48 3.32 3.28 3.20 3.72 2010 4.37 4.38 3.97 3.94 3.80 3.71 4.27 4.78 2011 5.09 5.29 5.71 6.18 5.78 6.53 6.27 7.13 6.37 7.15 7.37 6.40 2012 5.74 5.52 5.55 5.60 5.37 5.05 5.44 7.40 8.09 7.82 7.51 2013 6.30 6.28 5.77 5.47 5.50 5.33 4.53 4.59 4.33 2014 4.69 4.58 4.60 4.87 4.99 3.79 3.64 3.39 3.34 2015 4.24 4.22 4.05 3.78 3.70 4.31 3.76 3.87 3.83 2016 3.88 3.96 3.85 3.82 3.98 3.63 3.33 3.41 3.54 2017 3.89 3.86 3.90 3.57 Source: CBOT, Futures Price for 2nd Friday of the month

Average Price Captured Harvest Averaging Price Target Time & Price Extended 2000 1.66 1.91 1.76 2.02 2001 1.69 1.87 2002 2.29 2.11 2.31 2.35 2003 1.88 2.05 1.96 2004 1.73 2.24 2.40 2.41 2.33 2005 1.48 2006 2.69 2007 3.02 3.27 3.11 3.28 2008 3.69 5.13 4.16 5.24 2009 3.47 3.77 3.68 2010 5.04 3.84 3.87 3.74 2011 6.10 6.02 5.25 5.94 2012 7.42 6.17 5.97 5.80 2013 4.30 5.08 5.63 5.12 2014 2.96 3.85 4.00 4.17 2015 3.46 3.61 2016 3.10 3.34 3.29 2017 3.31 3.19 Average 3.42 3.33 3.39 Min Max

Lowest Average Harvest Averaging Price Target Time & Price Extended 2000 1.66 1.91 1.76 2.02 2001 1.69 1.87 2002 2.29 2.11 2.31 2.35 2003 1.88 2.05 1.96 2004 1.73 2.24 2.40 2.41 2.33 2005 1.48 2006 2.69 2007 3.02 3.27 3.11 3.28 2008 3.69 5.13 4.16 5.24 2009 3.47 3.77 3.68 2010 5.04 3.84 3.87 3.74 2011 6.10 6.02 5.25 5.94 2012 7.42 6.17 5.97 5.80 2013 4.30 5.08 5.63 5.12 2014 2.96 3.85 4.00 4.17 2015 3.46 3.61 2016 3.10 3.34 3.29 2017 3.31 3.19 Lowest out of 18 years 13 2 4 8 6

Highest Average Harvest Averaging Price Target Time & Price Extended 2000 1.66 1.91 1.76 2.02 2001 1.69 1.87 2002 2.29 2.11 2.31 2.35 2003 1.88 2.05 1.96 2004 1.73 2.24 2.40 2.41 2.33 2005 1.48 2006 2.69 2007 3.02 3.27 3.11 3.28 2008 3.69 5.13 4.16 5.24 2009 3.47 3.77 3.68 2010 5.04 3.84 3.87 3.74 2011 6.10 6.02 5.25 5.94 2012 7.42 6.17 5.97 5.80 2013 4.30 5.08 5.63 5.12 2014 2.96 3.85 4.00 4.17 2015 3.46 3.61 2016 3.10 3.34 3.29 2017 3.31 3.19 Highest out of 18 years 4 7 2 6

Longer History Harvest Averaging Price Target Time & Price Extended Time & Price Average 2.64 2.75 2.70 2.74 2.71 Min 1.14 1.41 Max 7.42 6.17 5.97 5.94 Low Price 28 8 5 13 11 High Price 10 4 16 Out of 42 years (1976-2017)

Class web site: http://www2.econ.iastate.edu/~chart/Classes/econ337/Spring2018/