RP92-217 #2 Producer Marketing Mangement: Deferred Pricing Alternatives for Grain

Grain producers must make marketing decisions every day. First they must decide whether to price or hold grain. If they decide to price grain, they must then choose the most appropriate method of pricing: cash sale, forward contract, or hedging. If they decide to hold grain (not to price), they must choose the most appropriate method of retaining ownership. This fact sheet presents some guidelines to help producers choose the least costly method of owning grain or speculating on price level changes.

Grain Storage Costs and Rental Rates

Trends in Grain Storage - Commercial grain storage eliminates the need to monitor grain conditions and, hence, offers the peace of mind that unsold grain will remain in condition. There may be a cost trade-off between this reduced storage risk and the cost of on-farm storage.

BIRD DEPREDATION ON RICE AND OTHER GRAINS IN ARKANSAS

In Arkansas, blackbirds are responsible for appreciable damage to rice, grain sorghum, oats, wheat, rye, and corn. By far, the greatest damage is to rice. As is shown in the following table, the losses to rice producers amounted to an estimated $3,049,055 in 1968, the last year that a survey was made. Nearly two-thirds (63%) of this loss was to standing rice destroyed and to the cost of bird control measure in standing rice. The remaining losses ($2,140,320 ) are to seeding or to efforts to control bird depredations to new seeding, (see Table 1). Blackbird damage to grain sorghum and corn was mostly to standing grain; that to oats, wheat and rye, to seeding, although there is occasional damage to standing grain. Additional problems are caused by blackbirds in feed lots. The total losses to Arkansas agricultural producers due to blackbirds in 1968 was about $3,500,000. Bird damage in a specific locality and on specific crops seems to vary in intensity from year to year. However, surveys during the past ten years suggest a fairly consistent level of total damage state-wide. The damage in 1968-and I believe in 1969—was somewhat lighter than we have come to expect from past exper¬ience. (See table 2.) On a per acre basis the damage in 1968 showed a considerable decline when compared to previous years. A part of this decline is probably a temporary situation. Some of the decline in losses to rice and grain sorghum, however, are due to changes in varieties, such as development of bird-resistant milo, and to changes in cultural methods. Further appreciable reductions due to changes in these factors seem unlikely, (see table 3.) Since rice producers sustain the greatest losses to birds, they have generated the greatest demand for bird control programs. Three species are responsible for most of the damage to rice. They are the red-winged blackbird, common grackle and brown-headed cowbird. These birds have created problems for rice producers since the first successful rice crop was grown near Lonoke, Arkansas, in 1904.

Evaluating the EDGE: What are the Impacts?

In 2008, the Center for Applied Rural Innovation conducted a comprehensive five-year evaluative study of the NebraskaEDGE program. Two different surveys were sent to former NebraskaEDGE training participants who were enrolled in the EDGE training courses between the Fall of 2002 and Spring of 2007. The objective of the surveys were to: 1) measure changes in participant knowledge and skills as a result of the entrepreneurial training class, and 2) better learn how participants applied their new skills to their businesses and what those impacts were on the businesses.