Econ' 338C: Introduction to MarketingGrain

1
Syllabus
Econ. 338C Introduction to Marketing--Grain
Spring 2004
Dr. Robert Wisner, University Professor Iowa
State University
2
http//www.econ.iastate.edu/faculty/wisner/
3
Instructor Robert N. Wisner

• Office 468G Heady Hall
• Phone [phone]
• e-mail wisner_at_iastate.edu
• Web site http//www.econ.iastate.edu/faculty/
• Office hours one hour before class
• Secretary Cindy Pease, 460 Heady Hall
• Phone [phone]

4
Course Description

• This course is designed to help understand
  grain marketing from a producer standpoint, as
  well as from the viewpoint of lenders, grain
  elevators, advisory services, and commodity
  brokers who work closely with farmers.
• It focuses on the importance of tailoring the
  marketing plan to specific needs of the
  individual farm business. Practical aspects
• of risk assessment and management are examined.

5
Course Description, Cont. I

• Marketing is the part of the farm business
  where cash in-flows match up with cash out-flows
  and determine net returns for production and
  storage enterprises. The course links marketing
  decisions to financial aspects of the business
  risk.
• It examines the role of various pricing tools
  revenue insurance in marketing grain.

6
Course Description, Cont. II

• Historical seasonality in Iowa cash corn and
  soybean prices, as well as new-crop futures and
  options premiums are examined.
• The course will include team projects and the use
  of software for evaluating marketing and
  risk-management alternatives, as well as for
  developing marketing plans.

7
Course Objectives

• To help you be better equipped to assist farmers
  in your future profession, and to improve your
  marketing skills if you farm
• To bridge the gap between understanding how
  marketing tools work, and the process of making
  marketing decisions
• To better understand the importance of
  marketing-management to the individual farm
  business

8
Course Objectives

• To help you understand the complementarity of
  revenue insurance pre-harvest pricing tools.
  They are not substitutes for each other.
• To provide hands-on experience and understanding
  of some software that is available for managing
  producer marketing decisions

9
Econ. 338C Course Objectives

• To increase understanding about commonly used
  types of grain contracts and areas of risk
  exposure in these contracts.
• To increase understanding of potential roles,
  advantages disadvantages of contracts in
  marketing grain, create awareness of risk of
  loss of govt. payments

10
Econ. 338C Course Reference Materials

• Text Managing Risks Profits, Grains Coping
  with volatile world markets, by Robert N. Wisner,
  E. Dean Baldwin, and Neal E. Blue.
• Available from Midwest Plan Service, 122 Davidson
  Hall, for 15.00
• Other selected articles and handout materials

11
Econ. 338C Course Reference Materials

• Lecture outlines and notes will be made available
  as handouts

12
Econ. 338CTeaching Methods

• Teaching methods include assigned readings, class
  exercises, lectures, exams, and papers
• Lectures will be to expand, interpret, clarify,
  explain reading materials
• Exercises will be used to develop application
  skills

13
Econ. 338CTeaching Methods

• Class discussion is encouraged to help extend and
  clarify lectures reading material
• Exercises will be based on actual price and yield
  data ISU estimated costs
• Internet sources of information will be made
  available for your use

14
Econ. 338C Exams Quizzes

• Two quizzes
• Mid-Semester Exam
• Final exam
• Optional Paper
• Exams quizzes will be short answer, multiple
  choice, true or false, short essay

15
Econ. 338C Example Paper Topics
Optional paper should be related to your
interests and expected future work.

• If you plan to farm, it might include an overview
  of your grain enterprises, and important
  considerations you intend to include in your
  grain marketing plan.
• If you expect to work in agricultural lending, it
  might focus on methods you would use to evaluate
  farmers marketing plans and how you might use
  that information in making loan decisions.
• If you expect to enter the crop insurance
  industry, it might focus on explaining to clients
  what types of insurance do and do not serve as
  companion pieces for pre-harvest pricing tools.

16
Econ. 338C Example Paper Topics, II
Optional paper should be related to your
interests and expected future work.

• If you plan to work as a commodity broker or
  market advisor, it might include a discussion of
  how you would address the marketing and
  risk-management needs of your clients, what
  information you would need from them, and how you
  might tailor marketing advice to individual farm
  situations.
• If you expect to work in a grain elevator or
  processing plant, it might include a discussion
  of how to help farmers understand that one size
  does not fit all when it comes to marketing
  plans.

17
Econ. 338C Grading
Opportunity for extra credit
Attendance
18
Econ. 338C Potential Benefits for farmers

• An average gain of 0.12 per bushel on a 1,400
  acre Central Iowa cash grain farm during a
  45-year farming career adds 750,000 of
  investment funds.
• excludes future gains in crop yields
  earnings on the funds generated by
  improved marketing