Five Steps in Developing a Successful Marketing Plan

Transcription

1 Five Steps in Developing a Successful Marketing Plan David Reinbott Agriculture Business Specialist P.O. Box 187 Benton, MO (573) reinbottd@missouri.edu

2 Marketing Decisions 1. Profitability Profit objectives Long run & Short Run Cash Flow Objectives Family Living Business Objectives Cash Flow and budget Objectives Family Living Objectives Long Term Investment Objectives

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5 Successful Farm Business - David Kohl Modest Family Living Expenses Goals Business, Family, Personal Continuing Education Meeting, Conf. Cost Control Good Records Financial, Prod, Family Ratio Analysis the what if s? Years worth of Debt Service in Reserve Work as a team Good relationships with your Lender

6 Marketing Decisions 2. Supply & Demand U.S. & World Acres planted, yield, exports, feed use, etc Weather planting, growing, harvesting, South America, China, World Ending Stocks Increasing or Decreasing

7 Marketing Decisions 3. Seasonal Trends Expect market tops and bottoms Futures, basis, cash

8 Marketing Decisions 4. Technical Analysis Charts Price direction up, down, sideways Change in Price Direction Gaps, reversals, trending lines, moving averages How high or low head shoulders formations, triangles, Fibonacci retracements

9 Marketing Decisions 5. Psychology of the Market Majority bullish or bearish? Price behavior reaction to bullish and bearish news Monthly USDA Reports, Weekly Crop Progress Reports Herd Mentality When everybody knows about it It takes bullish news to feed a bull market

10 David Reinbott January 15, 2014

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14 Corn CONAB Brazil first Crop Corn 32.6 mmt and second crop 42.8 mmt total 75.5 mmt or 3.0 BB U.S BB Fewer second crop corn acres in Brazil Rebound in Exports; Feed? Ethanol? China Cancelations and Argentina Crop Old crop E.S. getting tighter

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18 Supply & Demand: Corn Supply Beg. Stocks Production Use: Ethanol, other Feed Exports End Stocks Ave. Price $6.89 $4.50 Feb 10 WASDE $0.10

19 Supply & Demand: Corn Acres down 3 million Acres planted (mil.) 93.0/ / /85.1 Avg. yield/acre (bu.) Supply: (bil. bu.) Beg. Stocks Production Total Supply Use: Feed Other Exports Total Use Ending Stocks Avg. price/bu. $4.80 $4.40 $3.80

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22 Return to Storage From Change in Basis SEMO Cash Corn Barge Prices 9/1* March Futures 12/1 12/15 1/1 1/15 2/1 2/15 3/1 Year Yr Ave Yr Ave Yr Ave Yr Ave

23 Corn Returns to Storage from Change in Basis March Futures

24 Return to Storage From Change in Cash Price SEMO Cash Corn Barge Prices 9/1* 12/1 12/15 1/1 1/15 2/1 2/15 3/1 Year Yr Ave Yr Ave Yr Ave Yr Ave

25 Corn Returns to Storage from Change in Cash Price

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28 $5.20 March 2014 Corn Futures 62% - $ % - $ % - $4.50 $4.06

29 $5.70 December 2014 Corn Futures $ % - $ % - $ % - $4.73 $4.35

30 Corn Weekly Futures 6/2010 $3.24

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35 Soybeans CONAB Brazil Soybeans 90.0 mmt or 3.31 bb U.S bb Brazil from too dry to too wet harvest problems and plant second crop Strong exports Old crop stocks tight but ample new crop

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39 Supply & Demand: Soybean Acres Planted (mil.) Avg. yield/acre (bu.) Supply: (bil. bu.) Beg. Stocks Production Total Supply Use: Crush Other Exports Total Use Ending Stocks Avg. price/bu. $12.50 $14.40 $12.70 Jan To Feb Change $.20

40 Supply & Demand: Soybeans Acres up 6 Million Acres planted (mil.) Avg. yield/acre (bu.) Supply: (bil. bu.) Beg. Stocks Production Total Supply Use: Crush Other Exports Total Use Ending Stocks Avg. price/bu. $14.00 $10.50 $9.50

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43 Soybean Returns to Storage from Basis March Futures

44 Soybean Storage Returns Change in Cash Price

45 Returns to Basis, Cash, Buying Futures or Call Options On December 1 Cash Sales Made on December 1 2/1 2/1 2/1 2/1 3/1 3/1 3/1 3/1 Basis Cash Returns Returns Basis Cash Returns Returns Return Return to Buying to Buying Return Return to Buying to Buying Farm Farm Futures July Call Farm Farm Futures July Call Year Storage Storage Option Storage Storage Option Yr Ave Yr Ave Yr Ave

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48 $ March Soybeans $12.62 $12.33

49 $ November Soybeans $12.35 $11.80 $11.40 $10.95

50 Weekly Soybean Futures $12.50 $11.00 $9.00

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55 Supply & Demand: Wheat Acres Planted (mil.) Avg. yield/acre (bu.) Supply: (bil. bu.) Beg. Stocks Production Total Supply Use: Feed Food & Seed Exports Total Use Ending Stocks Avg. price/bu. $7.24 $7.77 $6.80 Jan To Feb Change

56 Supply & Demand: Wheat Acres planted (mil.) Avg. yield/acre (bu.) Supply: (bil. bu.) Beg. Stocks Production Total Supply Use: Feed Food & Seed Exports Total Use Ending Stocks Avg. price/bu. $6.75 $6.15 $5.80

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59 World Wheat Exports Country Exports MMT World 155 % of World Exports % of Country Use FSU % 33% U.S % 46% EU % 16% Australia 19 12% 76% Canada 20 13% 66% Argentina 6 4% 50%

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66 $ July Wheat 62% -$ % - $ % -$6.02 $5.57

67 Weekly Wheat $ $5.50 $4.25

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