Strategic Planning for Business Producers Marketing Plan Worksheet

Introduction: The marketing plan worksheet is a set of goals and objectives that sellers develop for the marketing of their grains. Emphasis is placed on passive marketing, that is, establishing a set of objectives and selling rules before the commodity is planted. The marketing plan's decision rules are followed regardless of existing conditions, and accounts are not actively managed.

Directions: Complete each of the worksheets to develop the marketing plan decision rules. Once decision rules are established, periodic review of the plan and market conditions should be performed as warranted. Be sure to fill in allsyellow shaded cells.

Acknowledgements: The marketing plan template is base on on-line materials found at Michigan State University's Cooperative Extension Service website. The spreadsheet was completed for the Executive Institute for Commercial Producers, funded by Farm Credit Services of Mid-America. Contact: James Pritchett, Phd. James.Pritchett@ColoState.edu (970) 491-5496

The Relaionship Between The Business Plan and Marketing Plan

In the space provided, describe how the market plan implements the strategic marketing position. How are the farm's the long term objectives and the short term objectives going to be met in the marketing plan? What will you consider when setting the price and "sold by" objectives?

Production History
Directions: Use this worksheet to summarize the recent production history of the farming operation. Production history information will help set the quantity objectives and how much grain will be allocated to each marketing instrument.

Corn
Year
1 2 3 4 5 6 7 8 9 10 Average Acres Harvested 500 750 800 1500 1500 1250 1100 850 750 1000 Average Yield Total Production (bu) (bu) 125 111 160 142 200 165 135 150 150 148.7 62,500 83,250 128,000 213,000 300,000 206,250 148,500 127,500 112,500 153,500 Planted Acres 1000 90% of Expected Production 80% of Expected Production 70% of Expected Production 60% of Expected Production 50% of Expected Production Expected Yield 125 112.5 100 87.5 75 62.5 Expected Production 125000 112500 100000 87500 75000 62500

Use the expected production totals when setting quantity targets. How much will you expect to produce? How much are you willing to contract?

Soybeans

Year
1 2 3 4 5 6 7 8 9 10 Average

Acres Harvested 500 750 800 1500 1500 1250 1100 850 750 1000

Average Yield Total Production (bu) (bu) 45 43 37 50 55 48 50 37 42 45.2 22,500 32,250 29,600 75,000 82,500 60,000 55,000 31,450 31,500 46,644

Planted Acres 1000 90% of Expected Production 80% of Expected Production 70% of Expected Production 60% of Expected Production 50% of Expected Production

Expected Yield 44 39.6 35.2 30.8 26.4 22

Expected Production (bu) 44000 39600 35200 30800 26400 22000

Use the expected production totals when setting quantity targets. How much will you expect to produce? How much are you willing to contract?

Expected Cash Prices

Directions: Place your own price forecasts on this page. Choose prices for the high, medium and low categories using forecasts from USDA, extension specialists or marketing services. Use a suitable time frame, that is if you plan to sell exclusively at harvest, use a harvest forecast, or if you will sell throughout the crop year use a marketing year average price forecast. If desired, list the target price for the crop Farm Bill.

Corn
High Medium Low Farm Bill $ $ $ $

($/bu) 3.00 2.80 2.40 2.60 ($/bu) 7.00 6.60 6.20 5.60

When are the historic futures price highs and lows? When are futures prices most variable? Is there a seasonal pattern to futures prcies?

Soybeans
High Medium Low Farm Bill $ $ $ $

When is basis the strongest (most narrow)? When is the basis the msot variable? Is ther a seasonal pattern to basis?

B 1 Costs 2

3 Directions: Price and revenue targets need to be made in the context of 4 the revenue needed to meet costs. This worksheet helps to ascertain price per bushel 5 needed to meet costs given the expected yields. Input the cost per acre in the yellow cells below. 6 Are the needed prices realistic given your forecasts in the pink cells? 7 8 9 Farm: 10 11 12 13 Variable Costs Variable + Machinery + Rent Variable + Machinery + Rent + Family $ $ $ 122.00 296.00 333.00 Needed Price/bu.@ expected yield $1.18 $2.57 $2.86 Medium 2.80 Low Farm Bill 2.40 $ 2.60 Measures Revenue required/acre

14 Corn: 15 16 17 18 19 20

Measures Variable Costs Variable + Machinery + Rent Variable + Machinery + Rent + Family

Revenue required/acre $ 147.00 $ 321.00 $ 358.00 High

1000 acres 125 yield/ac

Corn Price Estimates ($/bu)

3.00

21 22 Soybeans: Variable Costs 23 24 Variable + Machinery + Rent Variable + Machinery + Rent + Family 25 26 27 28 29 Soy Price Estimates ($/bu)

$ $ $

97.00 271.00 308.00 High

$2.20 $6.16 $7.00 Medium 6.60

1000 acres 44 yield/ac

7.00

Low Farm Bill 6.20 $ 5.60

Price, Date and Quantity Targets

Directions: Given the price and yield information you have entered, formulate price and quantity targets that will meet your marketing plan objectives. Be sure to input the quantity sold, method for selling (e.g., forward contracts), trigger price, and target date. Expected Price High Medium Low Expected Production (bu) $ $ $ Corn 3.00 2.80 2.40 125,000 $ $ $ Soybeans 7.00 6.60 6.20 44,000

Corn: Target Date Prior to March15 Late Spring Harvest Post-Harvest(Feb.) Method of sale/contracting (e.g. forward contract) % Priced Cumulative In Period 0% 0% 0% 0% In Period

Trigger Bushels Cumulative 0 0 0 0

Trigger Price In Period Cumulative $0.00 $0.00 $0.00 $0.00

Soybeans Target Date Prior to March15 Late Spring/ early summer Harvest Post-Harvest(Feb.) Method of sale/contracting (e.g. forward contract) % Priced Cumulative In Period 0% 0% 0% 0% In Period

Trigger Bushels Cumulative 0 0 0 0

Trigger Price In Period Cumulative $0.00 $0.00 $0.00 $0.00

Review and Evaluation

Directions: As the marketing year progresses, record sales of the crop on this worksheet and compare to the planned triggers, while noting any points of interest (unexpected conditions, circumstances changing expected production levels). Reviewing the record will prove useful in revising the marketing plan for the next season. Corn: Date Method(s) of contracting / sale Target

Bushels Target Price In Period Cumulative In Period Cumulative Prior to March15 (e.g. forward contract) 0 0 $0.00 $0.00 Late Spring 0 0 $0.00 $0.00 Harvest 0 0 $0.00 $0.00 Post-Harvest(Feb.) 0 0 $0.00 $0.00 Corn: Date Method(s) of contracting / sale Actual Bushels Target Price In Period Cumulative In Period Cumulative 0 $0.00 0 $0.00 0 $0.00 0 $0.00

Actual Production: Amount Purchased to Fulfill Contracts Total Cost of Purchased Grain Soybeans Date Prior to March15 Late Spring/ early summer Harvest Post-Harvest(Feb.) Soybeans Date Method(s) of contracting / sale Method(s) of contracting / sale Target Bushels Target Price In Period Cumulative In Period Cumulative (e.g. forward contract) 0 0 $0.00 $0.00 0 0 0 Actual Bushels Target Price In Period Cumulative In Period Cumulative 0 $0.00 0 $0.00 0 $0.00 0 $0.00 0 0 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Actual Production: Amount Purchased to Fulfill Contracts Total Cost of Purchased Grain