Changes in farm legislation, including the SURE and ACRE programs, expanded bio-fuels and ethanol, combined with volatile crop prices have caused many producers need to consider different methods for managing yield and price risk.

This workshop will introduce producers to an integrated marketing/production management approach that combines government programs, crop insurance and alternative marketing techniques. Among the topics addressed in this workshop are: Crop Revenue Insurance (CRC), Revenue Assurance (RA), Multi-Peril Crop Insurance Actual Production History (MPCI-APH), Income Protection (IP), Group Risk Plan (GRP), Group Risk Income Protection (GRIP), SURE and ACRE programs, futures, options, forward contracts, marketing loans, and basis contracts.

INSTRUCTORS: Dr. G.A. (Art) Barnaby and Dr. Daniel O'Brien.

SPONSORED BY:

Schedule

  8:30 a.m.     Registration

  9:00 a.m.    Introduction to Marketing:

Forward Contracts, Options, and Futures
Dr. Dan O’Brien

Discuss price risk management tools available to producers.

  9:45 a.m.   SURE and ACRE Programs

Dr. Art Barnaby

10:45 a.m.   Break

11:00 a.m.   Risk-Assessed Marketing (RAM)

Combines Marketing Tools, Commodity Program Payments, and Crop Insurance.

12:00 noon  Lunch

  1:00 p.m.  Introduce Case Farm

Dr. Art Barnaby

Explanation of case farm exercise.  Review of the case farm’s financial situation, government program participation decisions, and its costs of production.

  1:30 p.m.  Evaluate Insurance Alternatives

Workshop participants will evaluate and choose an insurance plan for the case farm.

  1:45 p.m.  Evaluate SURE & ACRE

Participants will be evaluate make a decision regarding participation in the ACRE program, taking into account the costs and trade-offs involved with that decision.

  2:00 p.m.  Evaluate Risk Management Strategies

Participants will be walked through the four pre-harvest marketing scenarios that are assumed to start at planting time.  Participants will evaluate risk/return trade-offs of their marketing strategy. With minimal guidance, workshop participants will make marketing decisions , which are assumed to take place on selected dates.  All grain not pre-harvest sold will be sold at harvest.

  3:00 p.m. Completion of Case Farm Exercise

At harvest, participants will randomly draw a yield to simulate yield risk. All market revenue and production expenses will be calculated.  Production expenses will include premiums for put options and insurance contracts selected by the participant.  Revenues will also include indemnity payments and any marketing gain/losses from futures or forward contracts.  Those having the highest net farm income for each of the four pre-determined yield categories will be recognized.

  3:30 p.m. Summary and Adjourn