MARKETING AND CROP INSURANCE COMBINED TO MANAGE RISK ON A CASS COUNTY REPRESENTATIVE FARM

This study analyzed the effects that the use of crop insurance products and marketing alternatives had on the gross revenue per acre for an individual farm in Cass County. Crop insurance products and marketing strategies were analyzed individually to determine if they were effective in minimizing down side risk, and combined to determine if integration created synergies. A whole farm scenario analysis was run that included integrated strategies that implemented the same insurance coverage and marketing alternatives for each crop. Several general conclusions can be drawn for situations similar to the representative farm. When analyzed at the individual crop level, the use of crop insurance at the 65 percent level minimizes down side risk in wheat and corn, but not significantly in soybeans. Marketing alternatives generally increase the up side potential of gross revenue per acre, while doing little to minimize the down side risk. The integration of crop insurance products and marketing alternatives create a synergy at the lower levels of value at risk, where the down side risk is located. However, the use of integrated strategies does not increase the chances of achieving a cash flow breakeven gross revenue per acre over the base strategy, which did not include insurance or marketing alternatives. The breakeven level is not reached until the 70 percent level, which means that 7 out of 10 years, the farm will not cash flow. Output from the Bullock and AgRisk models are similar. This study may be used as a guide for producers and analysts in studying risk management strategies. To assist in the individual decision making process, further study will need to be done with yield data and budgets for the individual farm.risk, management, strategy, yield, price, insurance, market, Risk and Uncertainty,

Wheat Marketing Strategies

Wheat prices were very strong during the end of November. Producers may have chosen to wrap up sales of old crop wheat on that strength. For those with wheat in the bin, modest price strength should be regarded as an opportunity to complete sales, especially if prices are as high as during late November. Scale-up selling of anticipated 1994 production on the Minneapolis Grain Exchange (MGE) at $.350 September futures or better should allow many producers to realize at least$3.00 on the farm, the anticipated 1994-95 seasonal average farm price. Such an opportunity should be captured whether in December, February, or May. For much higher prices to materialize, traders may have to see the development of unfavorable growing conditions

Sunflower Marketing Strategies

Price history suggests that any remaining old crop sunseed should be sold now. The sunflower (oil type) price in early April was a high as any price since 1986 (Fig 1). The average price of sunseed at Enderlin, N.D., from harvest in 1985 to March 1994 was 9.53 ¢/lb. Old crop price bids of 14 to 15 ¢/lb offered during early April not only exceed the long-term average price but also exceeded the 5-year average of 10.37 ¢/lb. A premium also was paid for high oil content. The new crop price level suggest that a set-up marketing plan for new crop should be considered. The new crop Enderlin sunseed bid exceeded the 5-year average most of the winter and was near 11 ¢/lb in early April. Farm level or local prices should have been around 10.5 ¢/lb. Forward pricing 30 to 40% of expected 1994 production by June 1, and more later if a weather rally occurs, may be a suitable plan for many producers. The national loan rate provides a floor price of 8.72 ¢/lb in case of lower prices later in the year. Remember, sunflowers produced in 0/92 acres as well as other acres on the same ASCS farm unit do not qualify for loan if the deficiency payment on the base crop is accepted

Late Planting Implications for Marketing Spring Wheat

A window of opportunity for selling the balance of old crop spring wheat as well as a portion of anticipated production may be availing itself to producers. Prices for old crop and new crop spring wheat have increased sharply in response to planting delays

ECONOMIC IMPACTS OF FUSARIUM HEAD BLIGHT IN WHEAT

Fusarium Head Blight (FHB), commonly known as scab, has been a severe problem for wheat producers in recent years. This study estimates the economic value of crop losses suffered by wheat producers in the 1990s. Nine states and three wheat classes are included in the analysis, which considers the effects of scab on both production and average prices received. The cumulative value of losses (1991-97) in scab-affected regions is estimated at $1.3 billion. Two states, North Dakota and Minnesota, account for over two-thirds of these dollar losses.Fusarium Head Blight, scab, crop losses, wheat, Production Economics,

Firm Growth Simulation as a Farm Management and Credit Evaluation Device

Agricultural Economic

SHORTFALLS IN 1997 NET FARM INCOME IN NORTH DAKOTA (Prepared for Senators Byron Dorgan and Kent Conrad)

North Dakota net farm income declined in 1997 due to adverse weather conditions and low prices. The total income loss in 1997 was estimated to be $394 million, which was divided into$290 million due to weather and diseases, and $104 million due to lower-than-average prices. Net farm income losses were largest in Region 3 (Northeast), followed by Regions 1 (Northwest) and 6 (East Central). HRS wheat accounted for the largest income loss, followed by durum and barley.Net farm income, crop losses, weather conditions, North Dakota input output model, Agricultural Finance,

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

Basis for Selected North Dakota Crops

EC-101

Marketing Club Performance

ER-7