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What Does Your Marketing-Management Plan Look Like?

Date: 
Author: 
Dr. David Kohl
Educational Opportunities: 
Videos
Interests: 
Grain, Young, Beginning Farmers, Women in Ag
Home > Education & Events > June 2017 > What Does Your Marketing-Management Plan Look Like?
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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.

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