1. Assistant Professor/Grain Markets Specialist
ECON 339X:
Agricultural Marketing
Chad Hart
Assistant Professor/Grain Markets Specialist 1

2. Marketing Plan Targets
Today’s Topic
Marketing Plan Targets

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

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

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

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

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

8. Average Price Captured

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

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

11. Average Price Captured

12. 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

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

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

15. Average Price Captured

16. 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

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

18. Average Price Captured

19. 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

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

21. Average Price Captured

22. Lowest Average

23. Highest Average

24. Class web site: http://www. econ. iastate