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 THE GRAIN MARKETER
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Measuring Program Effectiveness - Improving
Grain Marketing Knowledge
by E. Joseph Beiler
Extension agents and specialists have made many program and
evaluation efforts to improve farmers' grain marketing skills.
The evaluation effort described in this article was designed
to find out how much farmers learned about grain marketing techniques
in programs sponsored by Ohio Cooperative Extension Service
(OCES) the past four years in Mercer County, Ohio. We were interested
to see if the programs had helped increase these farmers' average
price of grain sold as compared to the average price of all
grain sold in Mercer County. Another purpose was to determine
what topics in grain marketing should be taught in the future,
and at what competency levels.
Marketing Questionnaire
In June 1984, we sent a four-part questionnaire to 80 farmers
who had participated in the Mercer County Extension programs
on grain marketing since August 1980. Section A in Part One
sought information on what had been learned from the topics
taught using the following scale: "0 " = knew nothing
to "4 " = very high level of understanding. Section
B explored the level of competency the participants wanted to
achieve through future training on each topic. "0 "
meant that the participant didn't want any more instruction,
"1 " that the participant wanted the teaching/learning
process to start from the basic level, and "4 " that
the participant wanted the topic to start at an advanced level.
Part Two explored the level at which participants wanted to
begin a more advanced marketing program, using the same scale
as Section B of Part One. The questions in Part Three were designed
to find out which of the taught skills farmers were using and
the amount of improvement they'd realized in the price received
for their grain as a result of taking part in the program. The
fourth section of the questionnaire was optional, asking for
background information on the participants' farming of the major
grain cropscorn, wheat, and beans. We mailed follow-up questionnaires
and made telephone calls to encourage the return of the questionnaires.
Sixty-two completed questionnaires (77.5%) were returned. Two
of these weren't properly completed, leaving 60 usable questionnaires
(75%). Miller and Smith's double-dipping procedure was used
to investigate the nonresponse cases in the study.1 By random
sampling, five (27.8%) of the nonresponding subjects were selected
and interviewed using new questionnaires. Examination of the
data comparing these nonrespondents and the respondents found
no significant difference, permitting us to generalize about
the remaining nonrespondents, who then numbered 13 (16% of the
target population).
Study's Objectives
The first objective was to determine how much of the teaching
of grain marketing was understood and adopted by the participating
farmers. After analysis of the responses, questions yielding
a mean average above 3.0 were interpreted as representing the
topics with which the majority of the participants were most
confident. These were: how to figure cost of production, how
to use delayed price, the need for marketing information, and
the relationship between supply and demand. The respondents
were fairly confident with the next group of topics (reported
mean averages between 2.55-2.93). In order, these topics were:
developing a market plan, using forward contracting, charting
local basis, marketing one crop over a two-year period, and
finding marketing information. The respondents gave the topic,
"How To Use Basis Contract, " a mean score of 2.31,
indicating that the topic was partially understood. The least
understood topic according to participant response was "How
To Use Hedging, " with a mean score of 1.69. We interpreted
this to mean that a low level of learning was achieved. Table
1 summarizes the information received on the adoption or practice
of methods learned by the participating farmers. The response
indicated that 93.9% had improved the average price received
for grain over the year. They indicated they improved their
return by an average of 24.9 cents/bushel on corn, 26 cents/bushel
on wheat, and 44.6 cents/ bushel on beans. This average was
determined by comparing the average price they received for
the year to the average price paid to all farmers in the county
for each marketing year. For example, if a farmer received $2.48/bushel
when the average price for the county was $2.53, the farmer
was -.05/bushel. The next year, after completing the course,
if he or she received $3.35 and the county average was $3.15,
the farmer was + .20 over the county average, and + .25 over
the year before. The farmers were supplied with the average
price of all grain sold in the county for 1980-81, 1981-82,
1982-83, and 1983-84 marketing years. They then compared the
average price they received to the county average and determined
their year-to-year difference for each crop. The second major
objective was to determine the level of training needed in the
future. On the basic grain marketing topics, a very high correlation
existed between responses for learning and needed knowledge-that
is, those questions with a high mean average for understanding
also had the highest mean average for training needed. This
indicates that no additional training is needed or that training
should start at an advanced level in all but two topics. The
responses on how to hedge and delay price categorized respondents
in two groups. If they understood these concepts, they said
no additional training was needed. If they didn't understand,
they desired the training to begin at a low competency level.
The mean scores on the other remaining skills indicated that
training should be started midway on the competency scale (between
2 and 2.49 levels). Another objective was to determine the level
of study for advanced marketing information desired by the clientele
after completing the basic level programs in grain marketing.
Apart from the topic areas of marketing options, price forecasting,
and foreign trade (with means of 2.08, 2.11, and 2.02 respectively),
all remaining items had means of less than 2. The least understood
of the topics, in descending order, were: trailing hedge, integrating
computer with market, use of spreads, and rolling a hedge, all
with mean scores under 1.31. Respondents, on the average, seemed
to want the program to start at just above the basic level,
except for the three topics that scored above 2. The response
to the marketing options question may be confounded because
marketing options may also refer to a type of sale and not to
options on the Board of Trade.
| Table 1. How farmers indicated their use of marketing
techniques. |
| Never |
Once |
Few |
Often |
Forward |
| contract |
15.0% |
6.67% |
38.3% |
40.0% |
| Basis contract |
63.9 |
1.60 |
26.2 |
8.2 |
| Hedge |
68.2 |
1.58 |
22.2 |
7.9 |
| Delayed price |
20.3 |
3.39 |
50.8 |
25.4 |
| Rolled a hedge |
86.4 |
1.69 |
11.8 |
0.0 |
The background information indicated that the respondents were
a cross-section of the grain farmers in Mercer County. Farming
experience ranged from one to 60 years, with most falling in
the 10-20 year range. The study showed that the farmers who
attended grain marketing programs learned how to use the basic
skills well, although the understanding of hedging and basis
contract was low. This could be due to the lack of elevators
offering a basis contract (only two out of eight major ones
do), not hedging because of the lack of a nearby broker, or
not selling enough grain of one kind at a time. The training
needed correlated well with what has been taught and showed
what areas should receive more attention. This study indicated
Extension in Mercer County is accomplishing its goal of improving
marketing knowledge. Participants learned they can improve their
marketing skills and thus improve their income. Extension marketing
programs do make a difference for Mercer County farmers.
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