A Look at the Structure, Strategies of Area Marketing Groups

By Marlene Dufault

Marketing groups have fast become a key medium for producers to receive, discuss, and act upon marketing information. Here’s what some leaders had to say about various discussions and strategies of their marketing groups:

Bismarck, ND Area Marketing Club
“Group members discuss strategies for small grains, livestock and sometimes dairy. Discussions range from what the markets are doing, to market trends and patterns.  A local elevator manager assists with the group, and sometimes we bring in a commodity broker to discuss strategies, or a farm business management expert to go over cost of production, so the members are fairly comfortable with looking at what their costs are.” – Elroy Haadem.

FARMM Club, Jamestown, ND
“Our meetings have been going on for three years and enrollment has been excellent. We are at full capacity. Our discussions range from what is going on in the markets, what kind of contracts are offered in the area, what kinds of bids are being offered, what the best strategies are and marketing plans. We have also been talking about what has been going on with the farm program. Speakers are invited to update us on issues. Crop insurance people come in and discuss different options, and local FSA office personnel also come in once in a while. New clubs are forming in Jud and Gackle, and one club is a livestock-only club, because they feel the need to have marketing in that specific area.” – Connie Ova

Ada, MN Marketing Group
“Members are very pleased with the soybean call options they purchased earlier this spring. Many members have already taken profits on those call options, but some have chosen to hold the call options throughout the weather rally. Members have been hesitant to sell soybeans until after the cash price rallies above the loan rate.  Basis fixed contracts were signed last January on the 2002 wheat crop, and the rally in wheat has finally given group members a good opportunity to lock in the futures side of those contracts. Group members stuck with the plan to sell 2003 Minneapolis wheat as soon as it came on the board, and they were able to take profits on those contracts when it dropped 20 cents. 2003 sales have been put off for the time being, but are still being considered.”— Melissa Petry

Kittson County Marketing Group in Hallock, MN
“Members are looking for the right time to lock in the futures on the basis fixed contracts they signed earlier this spring. The summer rally in wheat is providing some good opportunities to lock in the futures side of those contracts. The wheat crop in Kittson County will be a little disappointing, but the basis fixed contracts still need to be finished. For soybeans, the group is looking for $5 cash to begin making sales and hopefully selling the rest in November.”—Jim Wiese

Borderline Marketing Club, Hettinger, ND
“Lately we have been using instructions through George Flaskerud, our crops economist at NDSU. He has been putting together lesson plans which include planting time strategies, some additional marketing strategies and spraying structures.

We have a post-harvest marketing strategy meeting set up.  We discuss marketing plans and  we use a model farm in our discussions and have the members run through and try different scenarios with it. The members rely on instructors, since it is a classroom type meeting.  We get some individuals to do a little bit of marketing, but mainly they are in the learning stage of all this, since they have only been in place for about a year.” – Jesse Handegard

North Central Marketing Club, Minot, ND
“We’ve been meeting for about three years. We have hired people to come in for instruction on the basics of marketing, and we’ve had other people come in to talk about market updates. The group has formed committees, such as the durum committee, oilseed committee, and energy committee.  The members on these committees are responsible for bringing updates to the club, and they do a very good job of it. They get up in front of the group with charts, and some of the members have developed the information on a Power-point presentation. The key for a successful marketing club is to have the members be involved in the marketing process, and to keep current and to do their own research.  Then bring that information to the club, and the members have been very successful in doing that.  This keeps everyone informed as to the latest contracts available, and what specific elevators and marketing organizations are doing with specific crops.

“The North Central Beef Marketing Club is a spinoff of this group. It developed because we had members of the North Central club that were more interested in livestock rather than in crops. So they wanted to spend their time studying the livestock markets rather than just the crop markets. It is more of an area group club; the members are from a number of different counties.  They study the technical and fundamental aspects of the livestock markets. They have studied a lot of the same things the other clubs studied, using options and commodity markets, but looked at alliances and all kinds of things associated with the modern day market, including beef market cycles.” – Mike Rose (He also facilitates the Gooseneck Marketing Club, Kenmare, N.D.)

Dillion, MT Marketing Group
“Right now we’re an informational club, but looking towards trading as a club.  At monthly meetings, members bring current world conditions and weather information to keep the club members updated.  We are looking into doing basis fixed contracts, but haven’t done any yet.  We keep track of our basis, tracking it by graphs to see how it changes.”—Carl Malesich

RedNob Marketing Group,Lisbon/Enderlin, ND
“We go over marketing strategies, supply and demand, and market trends.  We have guest speakers and local elevator people come in, and we also have some local marketing services come in to do some presentations. The groups have been meeting for three years and meet every two weeks in the summer.  We haven’t gotten into any group trading, but we have an organized method of exchanging ideas and keeping current with the market situations.” – Virgil Dagman

Froid, MT Marketing Group
“We’ve been discussing what the futures have been doing, what the basis is and what the cash prices are at the elevators. We have some members who grow specialty crops, and the group discusses what is going on in those markets. A lot of our news comes from the Montana Market Manager website that the Grain Growers Association has. We have speakers come in to advise us on how to execute a certain type of trade, what’s going on in the world market and what producers should expect. We did trade as a group once, but it was very difficult and it didn’t work out that well. We haven’t done any (new crop) trading yet, but members are looking at different situations.  This is not a typical market as it has been the last few years.” – Kim Murray, who points out that this club also seeks and discusses information relating to production: This summer, they did field tours with an agronomist, monitoring moisture conditions and potential problems, such as weeds.

Barnes County Marketing Club, Valley City, ND
“During the growing season, we meet every other week but since the markets are crazy we are meeting weekly again. We usually try to bring someone in, at least one speaker per meeting, to discuss the latest information, whether is it the Farm Bill or a local elevator manager to talk about the latest contracts the elevator is offering. When we meet, we will split into four different groups, each with a specific commodity.  They will then talk about what happened last week in the markets with that commodity, and then they will give their personal opinions on what they might be doing as far as their operations, based on what the markets have done. The members feel they have been successful. The members strive for information, but have gone beyond education and have actually done the marketing as well. They have worked with local elevators and secured basis contracts, and have even contracted a trainload just for the membership through a local elevator, whichever is most competitive.” – Shawn Vaschal (He also facilitates a group in Litchville, N.D)

For more information about marketing groups in Minnesota, contact Betsy Jensen, ag commodity instructor, Northland Community and Technical College, by email at bjensen@nctc.mnscu.edu or by phone, 218-689-5375. 
In Montana, find more information online at www.montanamarketmanager.org , or contact Alex Offerdahl, Market Manager program coordinator, ph. 406-761-4596.
In North Dakota, find more information about marketing clubs online at www.ag.ndsu. nodak.edu/aginfo/cropmkt/clubs/clubs.htm