1. Agricultural Marketing
ECON 337:
Agricultural Marketing
Lee Schulz
Assistant Professor
Chad Hart
Associate Professor 1

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

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

4. Basis
Harvest basis from December corn futures for average cash prices for Iowa corn on the 2nd Friday of October, in $/bushel.

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

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

7. Average Price Captured

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

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

10. Average Price Captured

11. 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

12. Costs of Production Source: Iowa State University Extension,
Dr. Michael Duffy

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

14. Average Price Captured

15. 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

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

17. Average Price Captured

18. 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

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

20. Average Price Captured

21. Lowest Average

22. Highest Average

23. Longer History

24. Class web site: Have a great weekend.
Have a great weekend.