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What Does Your Marketing/Management Plan Look Like? (Video)
By: Dr. David Kohl, Agriculture Economist
TAGS: Grain, Dairy, Swine, Young, Beginning Farmers, Women In Agriculture, Risk Management Planning
 
February 23, 2017 -

Hi, I'm Dr. Dave Kohl, Professor Emeritus of Agriculture Economics down at Virginia Tech, Blacksburg Virginia. I was in a producer lender seminar, or actually three day retreat, and one of the producers really asked an intriguing question. He wanted to know how many of the fellow agricultural producers had a marketing plan and what was their understanding of that marketing plan or understanding of options and hedging, etc.

It was really interesting. 67% of the agricultural producers in that workshop did have a marketing plan and they used either options or hedging. Thirty-three percent, of course, didn't, but some of those producers had products that weren't conducive to marketing and hedging type of options.

But the interesting point was when we asked them to assess themselves on a one to ten scale, one being low understanding, ten be a high understanding. It was real interesting. Forty-four percent put a score of three or less, 30% between four and six, and we had about a quarter, 26%, greater than six.

When we asked the lenders what their assessment was of the producers in the room, they had a higher assessment, actually 27% of the lenders said the producers had a understanding less than three, but greater than six was 22%.

So actually they thought the producers really understood it better than the producers themselves did. What's this all mean? Well, I'm just going to look you square into the camera here.

Marketing and risk management's going to be very, very critical. Matter of fact it's going to differentiate the profits over the next few years and educational programs on marketing and risk management are going to be extremely, extremely critical. Producers, lenders and of course marketing folks are going to have to work side-by-side, particularly in this volatile economic environment where there is a challenge around every corner.

Again, a new twist to the macro clinic and we will see you the next time.


For some actionable tips on new strategies
for approaching your grain marketing and documenting a plan,
check out Kurt Lensing’s blog, Changing the Way You Approach Grain Marketing to Reduce Risk.


 

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Dr. David Kohl
Agriculture Economist
Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship at Virginia Tech, Blacksburg, VA.  He taught in the Agricultural and Applied Economics Department for 25 years. 

Dr. Kohl currently energizes agricultural lenders, producers and business people with his keen insight into the agricultural industry gained through extensive travel, research, and exposure during his career.  He has traveled over 8 million miles in his career and conducted more than 6,000 workshops and seminars for agricultural audiences.  He has published more than 1,300 articles and writes for many leading publications. 

Dr. Kohl’s personal involvement with agriculture and interaction with key industry players provide a unique perspective into future trends of the agricultural industry and economy. 
Contact Dr. David Kohl
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