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.

RP92-217 No. 19 Cost of Grain Storage

Grain marketing decisions are among the toughest the farm owner/operator or manager must make. Grain producers store grain to speculate on receiving higher prices, earn a return above storage costs, or to take advantage of government programs. Prices must increase enough to cover the additional costs, or forward contract prices must exceed current prices by more than the cost of storage in order to justify forward pricing. The gain in prices received can come from both changes in price level and changes in basis. This research publication discusses all the areas of the cost of grain storage.

RB32-270 A Seven Year Study of a Milk Supply

The amount of butter produced by the grain-belt states is evidence that a great many cows are milked by the midwestern farmer. Most of this milk is separated on the farm, the cream is sold, and the skimmilk is fed to hogs and other livestock. As the market for fluid milk has developed, many farmers near the cities have turned to the sale of milk, because it affords a better return for the butterfat sold. Much of the milk produced for sale as fluid milk is produced under practically the same conditions as milk which is produced primarily for the same of cream. The Department of Dairy Husbandry of the University of Nebraska, in conducting its instructional and investigational work, comes in contact with the milk producer. An effort has been made, therefore, to study the relation of milk quality to farm conditions as found among the milk producers or patrons who have delivered milk to the department. The study was carried on in an effort to find possible ways of bettering the conditions without upsetting the economic balance existing between the production of cream and fluid milk.

RP94-217 No. 18 Use of Crop Futures and Options by the Nontrader

Crop producers make a number of decisions that are market related. They may be categorized as financial decisions, production decisions, or marketing decisions. All three decisions depend on what prices are likely to be at some specific time in the future. The marketing decisions is complex. This research publication discusses the number of alternatives that are available even for the producer who does not directly buy or sell futures or options contracts.

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.