January 7, 2009

Extension program will help farmers develop a plan

WEST LAFAYETTE, Ind. - Purdue University will offer a five-part workshop series in 27 different locations across Indiana to take a comprehensive look at managing margin risk and help producers navigate uncharted waters.

The biggest thing farmers have to worry about is how to protect their profit margin, if they have one, said Corinne Alexander, Purdue Extension agricultural economist and program coordinator. Now, more than ever, producers have to be more active in protecting themselves from risk, she said.

"Farmers are operating in an environment where prices are extremely volatile and input costs fluctuate up and down," Alexander said. "Oftentimes, it appears prices have risen above the price farmers can sell at and make a profit.

"Many farmers are in a position to renegotiate their lease arrangements, and they need to take into consideration input costs, as well as new options put on the table by the farm bill."

The Managing Margin Risk program allows farmers to network and work with other farmers in their community who are struggling with the same issues they are and bounce ideas off each other and Purdue experts, Alexander said. Farmers will be asked to conduct their own breakeven analysis specific to their farm, as well as complete tasks outside of the workshop. In the end, farmers will have a personalized plan for how to cope in 2009.

A registration brochure is available online at https://www.extension.purdue.edu/Kosciusko/files/
ANR/MarginRiskBrochureplym.pdf
. Registration is $40 per person, which includes materials, handouts, access to the course Web site and refreshments. Individuals can register until Jan. 27, but will not be guaranteed a binder on the first night unless registered by Jan. 9. Registration is available online at http://www.conf.purdue.edu/RISK  or by making a check payable to Purdue University and mailing it to CEC Business Services, Purdue University, Stewart Center, Room 110, 128 Memorial Mall, West Lafayette, IN 47907.

Dates and topics for the five sessions include:

* Jan. 27. "A New Era of Margin Risk" will look at what margin risk is, the direction input costs are going, a breakeven analysis for farm enterprises and how leasing arrangements affect the bottom line.

* Feb. 3. "What Does the Farm Bill Mean to You?" will include an introduction to crop insurance, the new farm bill programs and how they influence each other.

* Feb. 10. "Current and Future Pricing Alternatives at the Local Buyer" will cover market volatility and dynamics, the importance of basis and pricing alternatives at the elevator.

* Feb. 17. "Combining Crop Insurance and Marketing Strategies" will take a look at how the two work together.

* Feb. 24. "Putting it All Together in a Plan to Manage Margin Risk" will show farmers how their financial position affects their ability to take on margin risks and what strategies they should consider.

This year, there are more decisions for farmers to make, Alexander said. The program is designed to help farmers understand how the different pieces, such as crop insurance, farm bill programs and marketing, fit together and how each influences the other.

"It's not enough just to focus on grain marketing," Alexander said. "You've got to focus on the whole picture, from costs all the way through to marketing, to figure out how to lock in a profitable margin so your farm operation can weather the storm."

Speakers include Purdue Extension agricultural economists Allan Gray, farm policy specialist; Chris Hurt, livestock and meat marketing expert; George Patrick, crop insurance expert; Luc Valentin, farm management specialist; and Alexander, who specializes in grain marketing for both commodity and specialty crops.

The series will be held via IP videoconference in the following counties: Adams, Allen, Bartholomew, Clay, Clinton, Decatur, Fountain, Greene, Hancock, Hendricks, Henry, Howard, Huntington, Marshall, Parke, Pike, Pulaski, Tippecanoe, Shelby, Spencer, Tipton, Vanderburgh, Vermillion, Washington and White. The program also will be held at the Pinney-Purdue Agricultural Center, located on the county line between Porter and LaPorte counties. A list of exact locations is available online at https://www.cec.purdue.edu/regforms/LOCATION%20LIST.pdf . For more information about locations, call your local Purdue Extension office or (888) EXT-INFO.

For questions or more information, contact Alexander at (765) 494-4249, cealexan@purdue.edu, or Luc Valentin at (765) 494-0468, lvalent@purdue.edu.

Writer: Julie Douglas, (765) 496-1050, douglajk@purdue.edu

Sources: Corinne Alexander, (765) 494-4249, cealexan@purdue.edu

Luc Valentin, (765) 494-0468, lvalent@purdue.edu

Ag Communications: (765) 494-2722;
Beth Forbes, forbes@purdue.edu
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