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Is Marketing a Waste of Time?

Kim B. Anderson

Summary

Some producers believe that commodity futures contracts and futures option contracts may be used to increase prices or profits. Research projects conducted at Oklahoma State University, Kansas State University and the University of Illinois all show that commodity futures and futures option contract, over time, do not increase prices or profits. Commodity futures and futures option contracts may be used to manage price risk. However, most producers may not need to use futures and futures option contracts to manage price risk.

Discussions will include how the market determines prices, how profit is earned through marketing, the accuracy of market advisory firms, which management practices may be used to increase profits, proof that most producers sell in the top one-third of the market, and a discussion of the biggest marketing mistake producers make.

Many producers do not know what to expect from their marketing efforts or what bench marks to use to measure market successes and failures. The material presented will help producers establish marketing goals and to design marketing programs that fit their needs and that allows them to direct their energy and efforts in management areas that maximize the odds of higher profits.

Details

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