Increased price volatility, lower crop
prices, and tight operating margins have increased the need for better risk
management skills. Although most crop producers are familiar with basis, the
relationship between local cash and futures market prices, relatively few
understand how to forecast basis and even fewer have access to historical basis
data in their market region – 85% of the producers we interacted with did not
have access to historical basis data.
This project developed and operationalized
the Purdue Center for Commercial Agriculture Crop Basis Tool which provides producers
in the eastern Corn Belt access to historical and contemporaneous basis data
they can use to analyze trends and develop basis forecasts. Improved ability to
forecast basis enabled producers to create more accurate expectations of local
cash prices, take advantage of profitable storage opportunities, and identify
profitable marketing alternatives beyond traditional market outlets.
Four
workshops were held and a webinar was recorded and posted to YouTube to teach
producers how to use the Crop Basis Tool to improve their marketing risk
management skills. More than 800 producers were reached through these workshops
and webinar, and the Crop Basis Tool website garnered over 2,500 visits since
January 2018.