Tools for the Trade:

Marketing and Risk Management Software, Info

Marketeer
Grain producers can navigate the ups and downs of volatile prices with a tailored marketing approach using Marketeer, a one-of-a-kind software program jointly developed by the University of Minnesota Center for Farm Financial Management and Country Hedging, Inc. Marketeer is the first software-planning tool whose written marketing plan includes a variety of what-if scenarios that allow you to see the results of different strategies at various price levels and the effect on your bottom line. Marketeer helps provide a total risk management package by performing a gross revenue per acre analysis combining crop insurance coverage with the marketing plan. Small grain and row crop producers gain confidence in making sales by knowing the likely outcome of their planned actions at different prices in the future.

James Ewing of Ewing Farms, who produces about 90,000 bushels of corn and 25,000 bushels of soybeans near Big Lake, MN wanted to maintain pricing and delivery flexibility.  “I needed to learn to hedge my sales with futures and options, besides forward contracting,” he says.  By using Marketeer and working with an advisor to develop and implement a plan, Jim was able to lock in good prices and pick his delivery destination at harvest time.  Producers like Jim have netted $38,000 more in yearly marketing income compared to producers without a plan.

The Marketeer program walks you through the process of writing a marketing plan, using a menu of marketing tools. It’s available for $295 plus your state sales tax. For more information contact Country Hedging, Inc. at (800) 378-5056, www.countryhedging.com or the Center for Farm Financial Management at (800) 234-1111, cffm@cffm.agecon.umn.edu.  A 10-day trial version is available for download at www.cffm.umn.edu.

System requirements include Windows 95, 98, 2000, or NT 4.0, with 32 MB of RAM: 100 MB of free hard drive space, and at least a 180 MHZ Pentium processor. If you’ve purchased a computer in the last few years, you’ll be in good shape.

FairRent
This software assists farmers/ranchers in determining what is an affordable price to pay for land rent. Features include revenue and expense projections for each crop in the plan. It provides a full analysis of the land rental picture, including cash and share rental analysis, comparisons between differing rental arrangements, and rent sensitivity based on variations in prices and yields. Cost is $95.  It can be found online at www.cffm.umn.edu or by calling the CFFM at 800-234-1111.

AgRisk
AgRisk is a Windows program designed to assist corn, soybean, wheat, and sorghum farmers to manage harvest-time revenue risk using forward, futures, options, and crop insurance contracts.  The software predicts the distribution of a farm’s gross revenue at harvest time under different pre-harvest risk management strategies that may involve any combination of crop insurance products and various grain pricing contracts. It is available free from Ohio State University, http://aede.osu.edu/Programs/AgRisk/.

Interactive Options Pricing Calculator
A joint project of AgriBiz.com and The Office for Futures and Options Research, University of Illinois at Urbana-Champaign, the Interactive Options Pricing Calculator is a tool for estimating the price of agricultural options given required input variables. The calculator is provided for educational use and is not intended for actual trading recommendations or analysis. A database of historical options closes is included to aid in educational applications. It can be found online at http://www.agribiz.com/cfor/.

StratSoy Cost of Carry Calculator
The cost of carry calculator determines the net return to storage offered by the current soybean market. The current price for futures contracts are shown. The calculator shows the gross spread from now to delivery month, interest cost to the delivery month, storage costs, and net carry. A positive net carry value indicates that the spread in prices (carry) exceeds the cost of storage. A negative value indicates that the cost of storage exceeds the premium the market is offering for later delivery.   Available online through the University of Illinois at Urbana-Champaign,
http://www.aces.uiuc.edu/~stratsoy/cbot/soycoc.html.

Risk Calculator 2.1
Developed by Matthew Diersen, risk and business management specialist at South Dakota State University, the Risk Calculator spreadsheet is designed to combine different risk management strategies to see how they affect crop revenue. Harvest-time “what if” scenarios can be conducted. It can be found free online at http://www.abs.sdstate.edu/agecon/

Rooster.com Decision Tools
Two decision tools can be found online in the Marketplace of www.rooster.com. The “Evaluating New Crop Marketing Alternatives” feature is a marketing tool that allows you to provide your input on anticipated production, county loan rate, current futures prices and current options prices, and builds an average price per bushel and a total revenue projection over a range of prices and marketing alternatives.  The “Break Even Analysis Against the Cost of Storage” feature calculates the cash price needed to break even against your storage costs, given current cash prices, interest rates, monthly storage charges and the number of months that you are intending to store your grain.

Breakeven Worksheet
In-your-face marketing guru Randy Allen offers a breakeven worksheet on his website, www.farmrwa.com.  The easy-to-follow online worksheet helps you calculate gross variable and fixed expenses for several different crops, including corn, soybeans, and wheat.

HedgeSim 3.0
This is a computerized simulation program where users practice applying risk management strategies to alternative farming units. The user manages either a grain farm or livestock feeding operation. Various marketing strategies can be implemented over time using cash, futures, and options markets. The user receives reasonable production costs and actual historical daily prices and government reports. Cost is $20. It can be found online at http://www.ace.uiuc.edu/ofor/hedgesim/hsim3.htm.

Farm Software Downloads
Montana State University offers a host of public domain spreadsheet templates that can be downloaded free to help producers make effective farm and ranch management decisions: http://www.montana.edu/wwwextec/software/software.htm.

Another website, http://www.farmsoftware.com/ was created by the Canadian Farm Business Management Council to help farmers more easily find the software they need. Over 10,000 farmers worldwide visit this site every month, according to the Council.

Crop Sequence Calculator
This free CD-ROM from the USDA-ARS Mandan Northern Great Plains Research Lab helps producers assess crop production options, and calculate the potential returns of ten different crops.  Expected crop prices and loan deficiency payments (LDP) can be input to provide rapid calculations of potential returns. The program contains information to assist producers in evaluating management risks associated with different crop sequences. The program may be requested on the NGPRL website, http://www.mandan.ars.usda.gov or by contacting the lab: USDA-ARS, Northern Great Plains Research Laboratory, PO Box 459, 1701 10th Ave, SW, Mandan, ND 58554, ph. (701) 667-3000.

“Toolshed” CDs Offer Tech, Ag Info
The Minnesota Wheat Research and Promotion Council, Syngenta and Northland Community and Technical College have put together CD-ROMs at no charge to producers that include information on: Internet application skills, commodity marketing information, the University of Minnesota Small Grains Production Guide and tutorials on how to use Toolshed Ag Information Network.

The MWRPC created “Toolshed” as a system for sharing ag-based information over the internet. It includes regional ag news and weather information, futures and local market prices, basis charts, Red River Farm Network radio broadcasts and archives, commodity marketing Q&As, LDP information, and industry contacts.  Producers may request a free copy of the CD by logging on to Toolshed, available on the website, www.smallgrains.org. Requests may also be taken by phone by calling 1-800-242-6118.