Researcher(s)
- Brock O’Day, Agriculture and Natural Resources, University of Kentucky
Faculty Mentor(s)
- Nate Bruce, Applied Economics, University of Delaware
Abstract
Grain producers have access to a variety of marketing tools to help manage price risk, yet many continue to rely primarily on cash sales and limited pre-harvest marketing strategies. Understanding how producers make marketing decisions and what factors influence those decisions can help Extension educators and agricultural professionals better address producer needs. This study examines the corn marketing practices, risk management strategies, and understanding of basis among grain producers.
A survey was developed and distributed to corn producers to collect information on marketing tools used, the percentage of grain marketed before harvest, factors influencing selling decisions, knowledge of basis, use of futures and options, and barriers to increased forward marketing. Additional questions examined farm characteristics, including irrigation, number of acres, on farm storage, and marketing style. Survey responses will be summarized using descriptive statistics, and relationships among selected variables will be analyzed to identify trends in producer decision-making.
Preliminary findings suggest that many producers rely heavily on cash or forward contract sales while limiting the use of futures and options. Marketing decisions appear to be influenced primarily by local cash prices, basis conditions, and concerns about missing future price rallies. These results highlight opportunities to improve producer education on marketing alternatives and risk management strategies while reinforcing the importance of basis knowledge in marketing decisions.
Future work will include completing survey data collection, conducting additional statistical analyses to evaluate relationships among producers characteristics and marketing behavior, and using the findings to support Extension programming that helps producers make more informed corn marketing decisions. The results of this study will contribute to a better understanding of producer marketing practices and identify areas where educational resources can improve farm profitability and risk management.