Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial and no warranty is given or implied by the author or any other party. Each farmer must consider whether such marketing strategies are appropriate for his or her situation. This web page does not represent the views of Kansas State University. 
Disclosure:  Dr. Barnaby’s research was the basis for the privately developed Crop Revenue Coverage.

Dr. G. A. (Art) Barnaby, Jr.

Dr. William I. (Bill) Tierney, Jr.

K-State Research and Extension

Dept. of Agricultural Economics

Kansas State University

Changes in farm legislation and low crop prices have caused many producers to consider different methods of managing yield and price risk. This workshop will introduce producers to an integrated marketing/production management approach that combines both crop insurance and alternative marketing techniques. Among the topics addressed in this workshop are: Revenue Assurance (RA), Crop Revenue Insurance (CRC), Multi-Peril Crop Insurance (MPCI), futures, options, forward contracts, marketing loans, and basis contracts. Following the workshop, producers should have a better understanding of how crop insurance, when combined with alternative marketing techniques, may be able to reduce farm financial risk as well as increase farm income.

8:30 a.m. Registration

9:00 a.m. Combined Risk Management (CRM) Combined With Marketing Tools and Production Flexibility Contract (PFC) Payments

__ Art Barnaby

Combined Risk Management is a different approach to marketing that will be necessary for growers to manage their risk. The CRM approach is based on an integrated, written marketing plan. Every marketing decision, including no decision, is then risk assessed. The new Revenue Assurance (RA) product will be covered. A comparison of RA with MPCI and CRC will also be completed.

10:30 a.m. Break

10:45 a.m. Introduction to Alternative Integrated Marketing Strategies

-_ Art Barnaby

A variety of integrated marketing strategies will be reviewed. These include: puts, calls, synthetic puts, forward contracts, hedges, equity, crop insurance, government programs and others. Marketing grain with low market prices will include pricing signals under the marketing loan program and managing the basis risk.

11:30 a.m. Introduce Case Farm

__ Bill Tierney

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

12:45 p.m. Evaluating CAT, MPCI, CRC, RA and Private Hail Insurance Options for the Case Farm

__ Art Barnaby

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

1:10 p.m. Evaluating Price Enhancement Strategies in the Case Farm

__ Bill Tierney

Historical returns to various pre_ and post harvest price enhancement strategies will be discussed. Participants will be "walked through" the first of four preharvest marketing scenarios, which, in this case farm, are assumed to take place at planting time.

1:30 p.m. Continuation of Case Farm Exercise

__ Bill Tierney

With minimal guidance, workshop participants will make marketing decisions for the next three marketing scenarios, which are assumed to take place on selected dates. All grain not preharvest sold will be sold at harvest.

2:15 p.m. Completion of Case Farm Exercise

__ Bill Tierney

Workshop participants will make sales decisions for the last marketing scenario. At harvest, participants will have a random "draw" to determine their yields based on a predetermined yield distribution.

Participants will then tally up all market revenue and production expenses. Those having the highest net farm income for each of the four predetermined yield categories will be identified.

2:45 p.m. Summary and Adjourn

__Art Barnaby

2:45 P.M. Summary and Adjourn Art Barnaby

"CRM opens the door to avenues for risk management most people have not considered, including myself."

Bob Paris, Kansas wheat grower.

"Barnaby and Tierney complement each other well and have an exciting presentation style as well as educational."

Dee Thiel, wife, mother, and wheat grower.

"The most complete and integrated risk management program that I have attended."

Merrill Nielson, Kansas wheat grower.

"CRM helped us select a marketing strategy that was practical and that we felt

comfortable with,"

Howard and Red Parr, corn and soybean growers.

"A simple and very understandable workshop for persons that are starting to use marketing and other risk management strategies for the first time."

Leon Flax, Senior Vice President, Fidelity State Bank, Dodge City

Kansas State University Agricultural Experiment Station and Cooperative Extension Service K-State, County Extension Councils, Extension Districts, and U.S. Department of Agriculture Cooperating. All educational programs and materials available without discrimination on the basis of race, color, religion, national origin, sex, age, or disability.