1. MARKETING in 2000 + Marketing Tools & Strategies
Dennis Schroeder
Marshall Farm & Agribusiness Management

2. Marketing tools for today’s farmer
MARKETING in
Marketing tools for today’s farmer
Cash contracts
Forward cash contract
Delayed price contracts
Govt. programs
Future fixed contract

3. Marketing tools (continued)
MARKETING in
Marketing tools (continued)
Hedging with futures
Hedging with call options
Hedging with put option
Basis fixed contract
Others

4. Marketing tools for today’s Farmer
MARKETING in
Marketing tools for today’s Farmer
Note: Marketing in Unit 2 will discuss the advantages & disadvantages of each marketing tool along with examples on how they are calculated.

5. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Futures-Up
Basic
Strengthen
Expected
Change
Basic
Weaken
Futures-Down

6. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Condition: Expecting
higher futures
and stronger basis
Futures-Up
Expected
Change
Basic
Strengthen

7. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Market Strategy
Store Grain
Delayed Price Contract
Futures-Up
Expected
Change
Basic
Strengthen

8. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Condition: Expecting
higher futures
and weakening basis
Futures-Up
Expected
Change
Basic
Weaken

9. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Market Strategy:
Basis Fixed Contract
Sell Cash / Buy Call
Sell Cash / Buy Futures
Futures-Up
Expected
Change
Basic
Weaken

10. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Expected
Change
Basic
Weaken
Condition: Expect
weakening basis
and lower futures
Futures-Down

11. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Expected
Change
Basic
Weaken
Market Strategy:
Sell Cash
Forward Contract
Futures-Down

12. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Expected
Change
Basic
Strengthen
Condition: Expect
strengthening basis
and lower futures
Futures-Down

13. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Expected
Change
Basic
Strengthen
Market Strategy:
Sell Futures
Buy a Put Option
Sell Futures / Buy a Call
Futures-Down

14. Marketing Strategies Selection Guide
MARKETING in
Marketing Strategies Selection Guide
Market Strategy
Basis fixed contract
Sell cash, buy call
Sell cash, buy futures
Market Strategy
Store grain
Delayed price contract
Futures-Up
Expected
Change
Basic
Strengthen
Basic
Weaken
Market Strategy
Sell futures
Buy a put option
Sell futures, buy call
Market Strategy
Sell cash
Forward contract
Futures-Down

15. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Purpose: To identify the price required to cover interest and storage costs over variable period of time.

16. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Step 1: Select current price $ / Bu. from left column
$ / Bu.
Code
Mo. 2
Mo. 4
Mo. 6
Mo. 8 A
7.18
7.35
7.53
7.71
$7.00 B
7.12
7.23
7.47
6.67
6.84
7.01
7.17
$6.50
6.61
6.72
6.83
6.93

17. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Step 2: Select row A or B Note: Code A = + Interest & Storage Code B = + interest only
$ / Bu.
Code
Mo. 2
Mo. 4
Mo. 6
Mo. 8 A
7.18
7.35
7.53
7.71
$7.00 B
7.12
7.23
7.47
6.67
6.84
7.01
7.17
$6.50
6.61
6.72
6.83
6.93

18. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Step 3: Move to the right to determine new price required to cover interest & storage costs for given number of months.
$ / Bu.
Code
Mo. 2
Mo. 4
Mo. 6
Mo. 8 A
7.18
7.35
7.53
7.71
$7.00 B
7.12
7.23
7.47
6.67
6.84
7.01
7.17
$6.50
6.61
6.72
6.83
6.93

19. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Test Yourself
Identify price required to cover interest and storage for the following situations:
Price = $5.50 Code A 8 Months

20. Storage & Interest Charts Test Yourself Price = $5.50 Code A 8 Months
MARKETING in
Storage & Interest Charts
Test Yourself
Price = $5.50 Code A 8 Months

21. Storage & Interest Charts Test Yourself Price = $5.50 Code A 8 Months
MARKETING in
Storage & Interest Charts
Test Yourself
Price = $5.50 Code A 8 Months
Answer = $6.11

22. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Test Yourself #2
Identify price required to cover interest and storage for the following situations:
Price = $1.80 Code A 10 Months

23. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Test Yourself #2
Price = $1.80 Code A 10 Months

24. Storage & Interest Charts
MARKETING in
Storage & Interest Charts
Test Yourself #2
Price = $1.80 Code A 10 Months
Answer = $2.25

25. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan
Purpose: To set marketing plan to activate the sale of a commodity with a target date or a target up or down price.

26. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

27. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

28. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

29. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

30. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

31. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

32. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan

33. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan
Market transaction activated by either:
Target date has arrived
Target up or target down price is met

34. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan
Target 2
1. Advance to Target 2
2. Enter Quantity and new Target Date

35. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan
Target 2
3. Enter $ Change
4. Enter current target price as New Price

36. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan
Target 2
5. Calculate and enter new target UP and target DOWN prices.

37. Target Up / Target Down Marketing Plan
MARKETING in
Target Up / Target Down Marketing Plan
Results:
The target up / target down process will help you plan your sales and avoid missing price movements that would be acceptable in your marketing plan.

38. Use these tools in marketing your commodities.
MARKETING in
Download and Print
When finished with this presentation, return to the course menu, load and print a copy of the Marketing Strategies Selection Guide, the Storage & Interest Charts, and the Target Up / Target Down Marketing Strategy.
Use these tools in marketing your commodities.

39. 3 Rules of Marketing Keep Good Records
MARKETING in
3 Rules of Marketing
Keep Good Records
Know your costs and determine your profit margins.

40. 3 Rules of Marketing 2. Take Profits
MARKETING in
3 Rules of Marketing
2. Take Profits
When you can price at a profit, do so.

41. 3 Rules of Marketing 3. Bet the odds
MARKETING in
3 Rules of Marketing
3. Bet the odds
Use historical data, seasonal trends, and the fundamentals.

42. Develop Written Marketing Plan
MARKETING in
Develop Written
Marketing Plan
To be covered in Units 2 & 3.

43. Marshall Farm Business Management
MARKETING in
Dennis Schroeder
Marshall Farm Business Management
401 South Saratoga St.
Marshall, MN 56258
(507) Phone & Fax

44. Return to checklist for next activity.
MARKETING in
Farm Business
Management
KEYS to SUCCESS
Return to checklist for next activity.