Grain Price Outlook and Market Strategies<br />Round Table Discussions<br />by Brian Roach<br />February 1 - 19, 2010<br /...
Roach Ag Marketing, Ltd. <br />7601 N. Federal Hwy<br />Suite 265-B<br />Boca Raton, FL  33487<br />800-622-7628<br />jroa...
Management is Responsible for<br /><ul><li>Production
Marketing
Risk Management
Finance
Labor
Planning
Business Succession</li></ul>© Roach Ag Marketing, Ltd.<br />
Marketing and Risk Management<br /><ul><li>Planning and executing crop sales
Crop Insurance
Option Strategies – Margin and non-margin</li></ul>© Roach Ag Marketing, Ltd.<br />
Planning and executing crop sales<br />What happened what can we learn from it and what should we expect ahead?<br />© Roa...
My Bias<br />Grain prices set their peak of a new price plateau in 2008. The new price plateau will remain but prices will...
Why will the new price plateau remain?<br />© Roach Ag Marketing, Ltd.<br />
Population Growth Rates<br />Source: USDA Agricultural Projections to 2017.<br />© Roach Ag Marketing, Ltd.<br />
Global Meat beef + pork + chickens & turkeys<br />Production, per capita consumption, and population<br />Source: USDA Agr...
Dollar’s value has been driving trade for the last 2 years<br />Dollar Index<br />© Roach Ag Marketing, Ltd.<br />
Index funds increasingly important beginning 4 years ago<br />© Roach Ag Marketing, Ltd.<br />
Five-year moving average of world production values.<br />© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
What role did fundamentals play in 2009 grain prices?<br />© Roach Ag Marketing, Ltd.<br />
#1 - World Soybean Crop down 27.4 million tons = 34% of entire U.S. Crop<br />© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
#3- On May 17 only 62% of the U.S. corn crop was planted with Illinois at 20%.<br />Beans were 25% planted with Illinois a...
What are the Fundamentals Now? <br />© Roach Ag Marketing, Ltd.<br />
Aug forecast +31.5 MMT                      Nov & Dec +39.4 MMT                          Jan +42.58 MMT  -  Feb +44.16 MMT...
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
Bean Situation and Price Outlook<br /><ul><li>U.S. and world inventory very tight now
China demand numbers less certain
2010 ending stocks no longer tight, but we must raise big crops in 2010
Prices should peak prior to normal March June selling season if no U.S. crop problem develops</li></ul>© Roach Ag Marketin...
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
FSU-12 Exports<br />2007-8 – 27.47 MMT<br />2008-9 – 54.71 MMT<br />2009-10 – 49.50 MMT<br />U.S. Corn Exports <br />2007-...
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
USDA 2009 World Corn Yields 12/10/09<br />© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
Corn Situation and Price Outlook<br /><ul><li>World coarse grain and U.S. ending stocks ample - but just barely. Wheat hur...
U.S. ending stocks likely to increase due to smaller exports and feed offset by + ethanol
Livestock producers losing less money
We still need a big corn crop every year and should have seasonal strength in 2010</li></ul>© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
Funds are big shorts<br />Wheat Situation and Price Outlook<br /><ul><li>World wheat ending stocks are 3rd largest on reco...
Prices increasingly dominated by former Soviet Union production
Index fund ownership distorting price higher and basis wider
2010 winter acreage 37.1 mil acres down 14.3% from 2009</li></ul>© Roach Ag Marketing, Ltd.<br />
How Should I Market My Crops?<br />© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
Roach Ag Sales Plan<br />Make as many of your sales as possible during the months of March, April, May and June.  Avoid Oc...
Rule # 1<br /><ul><li>Focus the majority of sales in the 1st half of the year
March through June is usually best</li></ul>© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />December 2007 Corn<br />Both Lines Over 75 = Roach Ag Sell Signal<br />
Roach Ag Sell & Buy Signals<br />Your Digital Thermometer For Prices<br />© Roach Ag Marketing, Ltd.<br />
Roach Ag Sell Signals<br />When Both Lines Are Above 75 = Sell Signal<br />© Roach Ag Marketing, Ltd.<br />
Roach Ag 2007 Corn Sell Signals<br />56 Days of Sell Signals ($3.91) and 272 Days Without ($3.71)<br />© Roach Ag Marketin...
Rule # 2<br /><ul><li>Sell only when markets are giving us a Roach Ag Sell Signal</li></ul>© Roach Ag Marketing, Ltd.<br />
Rule # 3<br /><ul><li>Figure out the percentage of bushels you are comfortable selling each and every spring and tie that ...
Rule # 4<br /><ul><li>Make sure you have enough on-farm or other owned storage to hold the balance of a crop using your be...
Rule # 5<br /><ul><li>Make sure you sell enough in the spring prior to harvest to generate necessary cash-flow from harves...
Rule # 6<br /><ul><li>Split your old crop bushels and new crop contracts into between 3 and 5 increments and sell one incr...
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />December 2009 Corn Sales<br...
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
© Roach Ag Marketing, Ltd.<br />
Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<...
© Roach Ag Marketing, Ltd.<br />
Who is<br />Agro is a service-oriented company that brings back the philosophy of customer service and reliability.<br />
Who is<br /><ul><li>Headquartered in Council Bluffs, Iowa
Agro entered the crop insurance market 2003
Agro National was established by Agro International, Inc. to serve the U.S. crop insurance market and to take advantage of...
Why do business with<br /><ul><li>Experience and Financial Stability
Superior Claims Service
Innovative and unique crop Insurance products
Great hail programs and rates
Systems and Technology</li></li></ul><li>Service Through<br />
113<br />AgroQuoter<br />
AgroQuoter<br /><ul><li>AgroPro
Ability to model a package for a producer to include all products together.
Additional product tabs will be shown if available
‘Loss Curtain’
Revenue at risk
On/Off switch
Values can be depicted separately by Level of Coverage in chart
Values can be depicted graphically by a specific Level of Coverage</li></li></ul><li>AgroWebMap<br />115<br /><ul><li>Main...
Integrated w/ eCrop
User-friendly
Map based Acreage Reporting
Assist in reducing errors
Map Booklets
CIMS</li></li></ul><li>CIMS<br />Comprehensive Information Management System<br />116<br />Agro National Inc. has recently...
117<br />CIMS<br />Producer / Policy  Data<br /><ul><li>Producer
Address
FSA Information
Summary
Email/Phone
Error Viewer</li></li></ul><li>118<br />CIMS<br />Field Borders<br /><ul><li>NEW FUNCTIONALITY
CIMS Policy borders, though not complete, have been released and are available in AgroWebMap.
When field borders are NOT present on a Policy, plus CIMS field borders are present for a policy, user will be prompted to...
To load CIMS field borders, select (click) OK.
To by-pass the loading of CIMS field borders, select (click) Cancel.</li></li></ul><li>119<br />CIMS<br />Field Borders<br...
Load CIMS field boundaries
Select (click) Add CIMS Fields button
Option to load with or without Rangeland field boundaries
After selecting (clicking) the ‘Add CIMS Fields’ button
Available Producer CIMS field borders will be loaded
Total field borders added
FSA numbers added</li></li></ul><li>120<br />CIMS<br />Field Borders<br /><ul><li>Field boundary layers available for review:
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Round Table Discussions 2-05-10

  1. 1. Grain Price Outlook and Market Strategies<br />Round Table Discussions<br />by Brian Roach<br />February 1 - 19, 2010<br />© Roach Ag Marketing, Ltd.<br />
  2. 2. Roach Ag Marketing, Ltd. <br />7601 N. Federal Hwy<br />Suite 265-B<br />Boca Raton, FL 33487<br />800-622-7628<br />jroach@roachag.com<br />http://www.roachag.com<br />© Roach Ag Marketing, Ltd.<br />
  3. 3. Management is Responsible for<br /><ul><li>Production
  4. 4. Marketing
  5. 5. Risk Management
  6. 6. Finance
  7. 7. Labor
  8. 8. Planning
  9. 9. Business Succession</li></ul>© Roach Ag Marketing, Ltd.<br />
  10. 10. Marketing and Risk Management<br /><ul><li>Planning and executing crop sales
  11. 11. Crop Insurance
  12. 12. Option Strategies – Margin and non-margin</li></ul>© Roach Ag Marketing, Ltd.<br />
  13. 13. Planning and executing crop sales<br />What happened what can we learn from it and what should we expect ahead?<br />© Roach Ag Marketing, Ltd.<br />
  14. 14. My Bias<br />Grain prices set their peak of a new price plateau in 2008. The new price plateau will remain but prices will search out the bottom of their range again this fall, if crops are good.<br />© Roach Ag Marketing, Ltd.<br />
  15. 15. Why will the new price plateau remain?<br />© Roach Ag Marketing, Ltd.<br />
  16. 16. Population Growth Rates<br />Source: USDA Agricultural Projections to 2017.<br />© Roach Ag Marketing, Ltd.<br />
  17. 17. Global Meat beef + pork + chickens & turkeys<br />Production, per capita consumption, and population<br />Source: USDA Agricultural Projections to 2017.<br />© Roach Ag Marketing, Ltd.<br />
  18. 18. Dollar’s value has been driving trade for the last 2 years<br />Dollar Index<br />© Roach Ag Marketing, Ltd.<br />
  19. 19. Index funds increasingly important beginning 4 years ago<br />© Roach Ag Marketing, Ltd.<br />
  20. 20. Five-year moving average of world production values.<br />© Roach Ag Marketing, Ltd.<br />
  21. 21. © Roach Ag Marketing, Ltd.<br />
  22. 22. © Roach Ag Marketing, Ltd.<br />
  23. 23. What role did fundamentals play in 2009 grain prices?<br />© Roach Ag Marketing, Ltd.<br />
  24. 24. #1 - World Soybean Crop down 27.4 million tons = 34% of entire U.S. Crop<br />© Roach Ag Marketing, Ltd.<br />
  25. 25. © Roach Ag Marketing, Ltd.<br />
  26. 26. #3- On May 17 only 62% of the U.S. corn crop was planted with Illinois at 20%.<br />Beans were 25% planted with Illinois at 1% <br />© Roach Ag Marketing, Ltd.<br />
  27. 27. What are the Fundamentals Now? <br />© Roach Ag Marketing, Ltd.<br />
  28. 28. Aug forecast +31.5 MMT Nov & Dec +39.4 MMT Jan +42.58 MMT - Feb +44.16 MMT<br />© Roach Ag Marketing, Ltd.<br />
  29. 29. © Roach Ag Marketing, Ltd.<br />
  30. 30. © Roach Ag Marketing, Ltd.<br />
  31. 31. © Roach Ag Marketing, Ltd.<br />
  32. 32. © Roach Ag Marketing, Ltd.<br />
  33. 33. © Roach Ag Marketing, Ltd.<br />
  34. 34. © Roach Ag Marketing, Ltd.<br />
  35. 35. © Roach Ag Marketing, Ltd.<br />
  36. 36. © Roach Ag Marketing, Ltd.<br />
  37. 37. © Roach Ag Marketing, Ltd.<br />
  38. 38. © Roach Ag Marketing, Ltd.<br />
  39. 39. © Roach Ag Marketing, Ltd.<br />
  40. 40. © Roach Ag Marketing, Ltd.<br />
  41. 41. © Roach Ag Marketing, Ltd.<br />
  42. 42. © Roach Ag Marketing, Ltd.<br />
  43. 43. © Roach Ag Marketing, Ltd.<br />
  44. 44. Bean Situation and Price Outlook<br /><ul><li>U.S. and world inventory very tight now
  45. 45. China demand numbers less certain
  46. 46. 2010 ending stocks no longer tight, but we must raise big crops in 2010
  47. 47. Prices should peak prior to normal March June selling season if no U.S. crop problem develops</li></ul>© Roach Ag Marketing, Ltd.<br />
  48. 48. © Roach Ag Marketing, Ltd.<br />
  49. 49. © Roach Ag Marketing, Ltd.<br />
  50. 50. FSU-12 Exports<br />2007-8 – 27.47 MMT<br />2008-9 – 54.71 MMT<br />2009-10 – 49.50 MMT<br />U.S. Corn Exports <br />2007-8 – 69.89 MMT<br />2008-9 – 51.17 MMT<br />2009-10 – 55.79 MMT<br />U.S. Wheat Exports <br />2007-8 – 34.36 MMT<br />2008-9 – 27.64 MMT<br />2009-10 – 22.45 MMT<br />© Roach Ag Marketing, Ltd.<br />
  51. 51. © Roach Ag Marketing, Ltd.<br />
  52. 52. © Roach Ag Marketing, Ltd.<br />
  53. 53. USDA 2009 World Corn Yields 12/10/09<br />© Roach Ag Marketing, Ltd.<br />
  54. 54. © Roach Ag Marketing, Ltd.<br />
  55. 55. © Roach Ag Marketing, Ltd.<br />
  56. 56. © Roach Ag Marketing, Ltd.<br />
  57. 57. © Roach Ag Marketing, Ltd.<br />
  58. 58. © Roach Ag Marketing, Ltd.<br />
  59. 59. © Roach Ag Marketing, Ltd.<br />
  60. 60. © Roach Ag Marketing, Ltd.<br />
  61. 61. © Roach Ag Marketing, Ltd.<br />
  62. 62. © Roach Ag Marketing, Ltd.<br />
  63. 63. © Roach Ag Marketing, Ltd.<br />
  64. 64. © Roach Ag Marketing, Ltd.<br />
  65. 65. © Roach Ag Marketing, Ltd.<br />
  66. 66. © Roach Ag Marketing, Ltd.<br />
  67. 67. © Roach Ag Marketing, Ltd.<br />
  68. 68. © Roach Ag Marketing, Ltd.<br />
  69. 69. © Roach Ag Marketing, Ltd.<br />
  70. 70. © Roach Ag Marketing, Ltd.<br />
  71. 71. Corn Situation and Price Outlook<br /><ul><li>World coarse grain and U.S. ending stocks ample - but just barely. Wheat hurting demand
  72. 72. U.S. ending stocks likely to increase due to smaller exports and feed offset by + ethanol
  73. 73. Livestock producers losing less money
  74. 74. We still need a big corn crop every year and should have seasonal strength in 2010</li></ul>© Roach Ag Marketing, Ltd.<br />
  75. 75. © Roach Ag Marketing, Ltd.<br />
  76. 76. © Roach Ag Marketing, Ltd.<br />
  77. 77. © Roach Ag Marketing, Ltd.<br />
  78. 78. © Roach Ag Marketing, Ltd.<br />
  79. 79. © Roach Ag Marketing, Ltd.<br />
  80. 80. © Roach Ag Marketing, Ltd.<br />
  81. 81. © Roach Ag Marketing, Ltd.<br />
  82. 82. © Roach Ag Marketing, Ltd.<br />
  83. 83. © Roach Ag Marketing, Ltd.<br />
  84. 84. Funds are big shorts<br />Wheat Situation and Price Outlook<br /><ul><li>World wheat ending stocks are 3rd largest on record and US biggest since 1988
  85. 85. Prices increasingly dominated by former Soviet Union production
  86. 86. Index fund ownership distorting price higher and basis wider
  87. 87. 2010 winter acreage 37.1 mil acres down 14.3% from 2009</li></ul>© Roach Ag Marketing, Ltd.<br />
  88. 88. How Should I Market My Crops?<br />© Roach Ag Marketing, Ltd.<br />
  89. 89. © Roach Ag Marketing, Ltd.<br />
  90. 90. © Roach Ag Marketing, Ltd.<br />
  91. 91. Roach Ag Sales Plan<br />Make as many of your sales as possible during the months of March, April, May and June. Avoid October and November<br />Sell in increments to take advantage of several market peaks using Roach Ag Sell Signals<br />Buy puts on unsold new crop production with either profit goal or insurance goal <br />© Roach Ag Marketing, Ltd.<br />
  92. 92. Rule # 1<br /><ul><li>Focus the majority of sales in the 1st half of the year
  93. 93. March through June is usually best</li></ul>© Roach Ag Marketing, Ltd.<br />
  94. 94. © Roach Ag Marketing, Ltd.<br />December 2007 Corn<br />Both Lines Over 75 = Roach Ag Sell Signal<br />
  95. 95. Roach Ag Sell & Buy Signals<br />Your Digital Thermometer For Prices<br />© Roach Ag Marketing, Ltd.<br />
  96. 96. Roach Ag Sell Signals<br />When Both Lines Are Above 75 = Sell Signal<br />© Roach Ag Marketing, Ltd.<br />
  97. 97. Roach Ag 2007 Corn Sell Signals<br />56 Days of Sell Signals ($3.91) and 272 Days Without ($3.71)<br />© Roach Ag Marketing, Ltd.<br />
  98. 98. Rule # 2<br /><ul><li>Sell only when markets are giving us a Roach Ag Sell Signal</li></ul>© Roach Ag Marketing, Ltd.<br />
  99. 99. Rule # 3<br /><ul><li>Figure out the percentage of bushels you are comfortable selling each and every spring and tie that % to the your crop insurance policy coverage level</li></ul>© Roach Ag Marketing, Ltd.<br />
  100. 100. Rule # 4<br /><ul><li>Make sure you have enough on-farm or other owned storage to hold the balance of a crop using your best ever yields</li></ul>© Roach Ag Marketing, Ltd.<br />
  101. 101. Rule # 5<br /><ul><li>Make sure you sell enough in the spring prior to harvest to generate necessary cash-flow from harvest through February</li></ul>© Roach Ag Marketing, Ltd.<br />
  102. 102. Rule # 6<br /><ul><li>Split your old crop bushels and new crop contracts into between 3 and 5 increments and sell one increment of each on each Sell Signal </li></ul>© Roach Ag Marketing, Ltd.<br />
  103. 103. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  104. 104. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  105. 105. © Roach Ag Marketing, Ltd.<br />
  106. 106. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  107. 107. © Roach Ag Marketing, Ltd.<br />
  108. 108. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  109. 109. © Roach Ag Marketing, Ltd.<br />
  110. 110. © Roach Ag Marketing, Ltd.<br />
  111. 111. © Roach Ag Marketing, Ltd.<br />
  112. 112. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />December 2009 Corn Sales<br />© Roach Ag Marketing, Ltd.<br />
  113. 113. © Roach Ag Marketing, Ltd.<br />
  114. 114. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  115. 115. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  116. 116. © Roach Ag Marketing, Ltd.<br />
  117. 117. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  118. 118. © Roach Ag Marketing, Ltd.<br />
  119. 119. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  120. 120. © Roach Ag Marketing, Ltd.<br />
  121. 121. © Roach Ag Marketing, Ltd.<br />
  122. 122. © Roach Ag Marketing, Ltd.<br />
  123. 123. Put Opportunity - Buy Puts on some of the Crop You Do Not Want to Sell on a Cash Contract<br />© Roach Ag Marketing, Ltd.<br />
  124. 124. © Roach Ag Marketing, Ltd.<br />
  125. 125.
  126. 126. Who is<br />Agro is a service-oriented company that brings back the philosophy of customer service and reliability.<br />
  127. 127. Who is<br /><ul><li>Headquartered in Council Bluffs, Iowa
  128. 128. Agro entered the crop insurance market 2003
  129. 129. Agro National was established by Agro International, Inc. to serve the U.S. crop insurance market and to take advantage of the skills and management developed over the last 15 years in providing crop consulting expertise worldwide.</li></li></ul><li>Who is<br />
  130. 130. Why do business with<br /><ul><li>Experience and Financial Stability
  131. 131. Superior Claims Service
  132. 132. Innovative and unique crop Insurance products
  133. 133. Great hail programs and rates
  134. 134. Systems and Technology</li></li></ul><li>Service Through<br />
  135. 135. 113<br />AgroQuoter<br />
  136. 136. AgroQuoter<br /><ul><li>AgroPro
  137. 137. Ability to model a package for a producer to include all products together.
  138. 138. Additional product tabs will be shown if available
  139. 139. ‘Loss Curtain’
  140. 140. Revenue at risk
  141. 141. On/Off switch
  142. 142. Values can be depicted separately by Level of Coverage in chart
  143. 143. Values can be depicted graphically by a specific Level of Coverage</li></li></ul><li>AgroWebMap<br />115<br /><ul><li>Maintained In-house
  144. 144. Integrated w/ eCrop
  145. 145. User-friendly
  146. 146. Map based Acreage Reporting
  147. 147. Assist in reducing errors
  148. 148. Map Booklets
  149. 149. CIMS</li></li></ul><li>CIMS<br />Comprehensive Information Management System<br />116<br />Agro National Inc. has recently started the process of requesting and downloading of the Comprehensive Information Management System (CIMS) data from RMA. Our agents now have the ability to access this data in eCrop, which is a compilation of information from FSA, RMA and Agro National Inc. <br />CIMS will allow an agent access to FSA information for their insured producers<br />which can reduce the reporting burdens on producers, agents and Agro National Inc. with the delivery of the crop insurance program. Access to the CIMS information will help in the reduction of costs associated with data collection, assist in the identification of data inconsistencies, and reporting errors.<br />Agro National Inc. has placed a great deal of importance on the implementation and availability of CIMS data to our agents and will continue to enhance our systems to take full advantage of this information. <br />As additional CIMS information and functionality is made available in Agro National Inc.’s suite of software systems, documentation will be made available.<br />
  150. 150. 117<br />CIMS<br />Producer / Policy Data<br /><ul><li>Producer
  151. 151. Address
  152. 152. FSA Information
  153. 153. Summary
  154. 154. Email/Phone
  155. 155. Error Viewer</li></li></ul><li>118<br />CIMS<br />Field Borders<br /><ul><li>NEW FUNCTIONALITY
  156. 156. CIMS Policy borders, though not complete, have been released and are available in AgroWebMap.
  157. 157. When field borders are NOT present on a Policy, plus CIMS field borders are present for a policy, user will be prompted to load CIMS.
  158. 158. To load CIMS field borders, select (click) OK.
  159. 159. To by-pass the loading of CIMS field borders, select (click) Cancel.</li></li></ul><li>119<br />CIMS<br />Field Borders<br />Replica of the FSA 578<br />based on CIMS data<br />MapView / FarmView<br /><ul><li>After selecting (clicking) OK to load ‘CIMS data to the Policy’
  160. 160. Load CIMS field boundaries
  161. 161. Select (click) Add CIMS Fields button
  162. 162. Option to load with or without Rangeland field boundaries
  163. 163. After selecting (clicking) the ‘Add CIMS Fields’ button
  164. 164. Available Producer CIMS field borders will be loaded
  165. 165. Total field borders added
  166. 166. FSA numbers added</li></li></ul><li>120<br />CIMS<br />Field Borders<br /><ul><li>Field boundary layers available for review:
  167. 167. CIMS field borders based on last information received from RMA
  168. 168. CIMS Policy Fields
  169. 169. Field boundaries specific to Producer, State/County and Location
  170. 170. All CIMS Fields
  171. 171. Field boundaries specific to State/County and Location
  172. 172. Field boundaries last updated in May 2008
  173. 173. Old Fsa Fields</li></li></ul><li>121<br />
  174. 174. AgroWebMap Hail Probability<br />122<br />AgroWebMap gives users the functionality to integrate FSA field borders, FSA imagery and hail probability, based on date, on current Agro National Inc. agency crop hail policies. This will allow users to visually depict, as well as, print maps for individual crop hail policies with the Hail Probability layer for a specific date, color-coded by hail intensity. <br />Hail Probability report’s available:<br /><ul><li>Hail Report
  175. 175. An overview of all sections farmed for the policy
  176. 176. Can be viewed on a national level down to a section level.
  177. 177. Policy Report
  178. 178. A map-based report with a cover page that shows an overview of all sections farmed for the policy, followed by the individual locations with the FSA field borders and acres, FSA imagery and the Hail Probability layer for a selected specific date.</li></li></ul><li>Hail Probability<br />Hail Report<br /><ul><li>US View
  179. 179. Hail Probability layer selected
  180. 180. Additional layers that can be selected and printed
  181. 181. Major Roads and Minor Roads
  182. 182. Policy View
  183. 183. Hail Probability layer selected
  184. 184. Additional layers that can be selected and printed
  185. 185. Major Roads and Minor Roads
  186. 186. Section View
  187. 187. Hail Probability layer selected
  188. 188. Additional layers that can be selected and printed
  189. 189. ALL available layers</li></ul>123<br />
  190. 190. 124<br />Trigger Yield / Revenue Report<br /><ul><li>Functionality to print individual policy or batch print
  191. 191. Acceptable Production Reporting form</li></li></ul><li>125<br />Joe Farmer <br />Johny Agent<br />
  192. 192. ACRES <br />Automated Claims Routing Electronic System<br />
  193. 193. ACRES <br />Automated Claims Routing Electronic System<br /><ul><li>ACRES has been production for 1 year
  194. 194. Adjusters are able to complete Harvest, Replant and PP losses for:
  195. 195. Corn
  196. 196. Grain Sorghum
  197. 197. Soybeans
  198. 198. Wheat
  199. 199. Barley
  200. 200. Oats
  201. 201. Rye
  202. 202. Cotton (Replant not applicable for Cotton.)</li></li></ul><li>ACRES <br />Automated Claims Routing Electronic System<br /><ul><li>A few of the changes/enhancements that have been implemented:
  203. 203. Appraisals and Harvested Production for Cotton
  204. 204. Including Quality
  205. 205. Mycotoxins (Aflatoxin, Vomitoxin and Fumonisin) fields were added
  206. 206. If user enters in both RIV and Mycotoxins, ACRES requires user to select an option to determine which of the two should be applied
  207. 207. Ability to enter Inverted Cones
  208. 208. Ability to enter Replants without acres being reported yet for the current year</li></li></ul><li>ACRES <br />Automated Claims Routing Electronic System<br />A new Loss Production Summary Form was developed this past year. When this is <br />printed out of ACRES, the insured is only required to sign the last page of this form<br />rather than ALL the applicable Production Worksheets for the loss.<br /><ul><li>Note: All appraisals are still required to be signed.)</li></li></ul><li>Private Products<br />BPM, UP, and IRO<br />130<br />
  209. 209. BASE PRICE MODIFIER (BPM)<br />
  210. 210. 132<br /><ul><li>The BPM Policy increases the price election selected under the applicable MPCI Policy, whether APH, Crop Revenue Coverage (CRC) or Revenue Assurance (RA).
  211. 211. The BPM Policy does not protect against price fluctuations, and the BPM price election will not increase regardless of the price fluctuation under the CRC and RA policies.</li></li></ul><li>133<br />ELIGIBLE COVERAGE LEVELS<br />The BPM policy is only available on the following coverage levels: 65, 70, 75, 80, or 85.<br />BPM PRICE FACTORS<br />To determine the maximum amount of price coverage you can purchase for BPM refer to the Price factor table associated with the level of coverage purchased under the MPCI policy.<br />
  212. 212. 134<br />BPM PRICE FACTORS<br />The Base Price Factor is multiplied by the MPCI, CRC, or RA base price to determine the BPM added price election. ie: <br />Mpci corn base price of $3.50 X the 75% level factor of .3333 = would equal $1.17 per bushel. <br />Multiply $1.17 cents per bushel times the MPCI guaranteed bushels to determine coverage per acre.<br />
  213. 213. 135<br />BPM LOSS EXAMPLE<br />
  214. 214. 136<br />FOR MORE INFORMATION ON BPM!!!<br />CONTACT AN AGRO NATIONAL AGENT <br />
  215. 215. MARKET “UP”<br /> Umbrella Named Peril Policy<br />
  216. 216. Umbrella Policy “UP”<br />The Umbrella Policy (UP) provides yield coverage for two consecutive years at 90% of an Enterprise APH. UP coverage starts at 90% and ends at 75%, where an underlying MPCI policy would provide coverage on an annual basis. <br />The policy is designed to cover back to back shallow losses and also to provide protection for hedging input costs further out than existing annual insurance products. <br /> UP is only available on corn in select states. Check with your Agro agent for availability in your area. The UP is a private policy and is not reinsured by FCIC. <br />138<br />
  217. 217. Increased Replant Option (IRO)<br />
  218. 218. Increased Replant Option forCorn and Soybeans (IRO)<br /><ul><li>The Increased Replant Option (IRO) policy for corn and soybeans supplements the coverage provided by the Multiple Peril Crop Insurance (MPCI) policies authorized and reinsured by the Federal Crop Insurance Corporation (FCIC).
  219. 219. The IRO policy is a private policy and is not reinsured by FCIC. However, with limited exceptions described in the policy and this manual, the guidelines applicable to the MPCI policy apply equally to the IRO policy. </li></li></ul><li>Increased Replant Option forCorn and Soybeans (IRO)<br /><ul><li>By purchasing the IRO policy, an insured may be eligible for replant coverage and payments on a small parcel of land that would not qualify for coverage or a payment under the provisions of the applicable MPCI policy.
  220. 220. Unlike the replant provisions of the various MPCI policies, IRO does not have a minimum 20% or 20 acres acreage requirement.</li></li></ul><li>Increased Replant Option forCorn and Soybeans (IRO)<br />IRO is available on polices covered under the APH, Crop Revenue Coverage (CRC), and Revenue Assurance (RA) Plans of Insurance. <br />
  221. 221. Increased Replant Option forCorn and Soybeans (IRO)<br /><ul><li>The intent of the IRO policy is to allow the insured the opportunity to supplement any replant payment they may receive under their MPCI policy.
  222. 222. The total replanting reimbursement per acre – MPCI plus IRO – shall not exceed the Selected per-acre dollar amount of coverage or the per acre actual cost incurred in replanting insured acreage.</li></li></ul><li>Increased Replant Option forCorn and Soybeans (IRO)<br /><ul><li>The IRO corn and soybean policy offers three dollar amounts of coverage per acre. $30, $40, and $50. The amount of coverage selected will determine the premium rate. RATES ARE PER ACRE</li></li></ul><li>145<br />
  223. 223. Increased Replant Option forCorn and Soybeans (IRO)<br />QUESTIONS?<br />
  224. 224. Closing Thoughts<br />147<br />
  225. 225. 4 Pillars of Financial stability<br />
  226. 226. Why Market Grain Aggressively?<br />In the last 21 years, <br />Comparing December Corn Futures in <br />March–June vs. Oct-Nov<br /><ul><li>Dropped Significantly – 15 years
  227. 227. Drifted Sideways – 3 years
  228. 228. Increased Significantly – 3 years</li></ul>Marketing Ahead is Correct 85% of the Time!<br />
  229. 229. What is it worth?<br />The 5 Year Ave. of Dec corn during <br />Roach Mar – June Sell Signals = $3.73<br />The 5 Year Ave. of Dec corn during <br />Oct – Nov $3.07<br /> 0.66<br />
  230. 230. What is it worth?<br />175 bpa X 0.66 = $115 per acre<br />
  231. 231. Why don’t Farmers Market Grain Aggressively?<br />Yield Risk<br />“I can’t sell what I haven’t produced.”<br />Price Risk<br />“If I sell, Prices might go higher.”<br />Marketing Risk<br />“If I oversell, I won’t have enough money to buy-back my sales.”<br />
  232. 232. Roach Ag Planning Process<br />Begins with a Plan for your farm<br />Detailed for consulting clients<br />More general for Basic Level of Service <br />Review of storage, inventory and forward sell ideas<br />
  233. 233.
  234. 234. Revenue Insurance<br />CRC & RA-HP ( Helps your marketing)<br /><ul><li> Guarantees your yield
  235. 235. Replaces lost bushels (below guarantee) at higher of February or Fall Price
  236. 236. Establishes a Revenue Guarantee
  237. 237. Can be Used to Insure Your Input Costs and forward sales
  238. 238. Excellent Collateral for Farm Loan</li></li></ul><li>Revenue Insurance is cost effective for some farms :<br />
  239. 239. Revenue Insurance is cost effective for some farms :<br />QUESTIONS? PUTS….?<br />Revenue Guarantee of $576 ÷ 175 bu APH = Net Price Guarantee of $3.29<br />
  240. 240. Uninsured Grain <br />Why use Put options to cover bushels we don’t sell? <br />Crop insurance buys you dollars per acre coverage based on (Price X Yield)<br />Put options insure only price – On most farms the greater risk lies in price loss, not yield losses. <br />Options are used in our plan to put a floor under bushels a farmer is not ready, willing or comfortable selling.<br />We average them in at the seasonal high on Sell Signals. <br />
  241. 241. Put Option Charts<br />
  242. 242. Sell Call Option Strategy<br /><ul><li>Enter trade on Sell Signal
  243. 243. Use new crop months for corn / soybeans {Nov/Dec}
  244. 244. Think selling at a price well above today’s futures price in the new crop month – you must like the strike price.
  245. 245. Opportunities work best early in the year – options are priced higher for volatility and time value.
  246. 246. Can be used to partially offset insurance premium on conservative quantity of unsold bushels
  247. 247. Must have bankers approval and ACH in place.
  248. 248. Options often expire without value at contract expiration.
  249. 249. We work with you one on one to educate & train. </li></li></ul><li>Marketing Example: <br />200/bu expected yield with 85% coverage on 175 APH<br />100 bu/acre - Cash/HTA/Futures Contract – Farmer chose percentage <br /> 50 bu/acre - Non margin plain vanilla puts – Profit 30 cents = $15 per acre<br /> 50 bu/acre - Sell $5.00 Call Option - Profit 17.5 cents = $8.75 per acre<br />Strategy earns $15 + $8.75 = $23.75<br />
  250. 250. Roach Ag marketing example: <br />200/bu expected yield with 85% coverage on 175 APH<br />150 bu/acre - Cash/HTA/Futures Contract – RAM chose percentage <br /> 25 bu/acre - Non margin plain vanilla puts – Profit 30 cents = $7.50 per acre<br /> 25 bu/acre - Sell Call Options - Collected 17.5 cents = $4.37 per acre<br />Strategy earns 50 bushels X 0.66 per bushel = $33 per acre + $11.87 = $44.87 per acre<br />
  251. 251. Roach Ag Tier Plans for managing Risk<br />Participate in each Tier based on your comfort level :<br />I . Daily Grain Plan – our basic level of service. Includes a basic marketing plan, Roach Ag Sell Signal alerts for corn, soybeans and wheat. <br />II. Non-margin Put options bought on Sell Signals to insure price on bushels we do not sell ahead.<br />III. Margined Options strategy to help offset Insurance premium. <br />IV. Crop Insurance – completes the risk management core services for Roach Ag to assist you with managing all your farm marketing risk.<br />V. Consulting services include a formal plan and close contact with an ag. consultant regarding execution of the plan, capital planning and closely held financial decisions. <br />
  252. 252. Roach Ag’s Tool Box for Marketing<br />Grain Plan for selling grain on Sell Signals<br />Option strategy to support unsold grain at higher spring levels. <br />Local crop insurance support to make sure your policies are accurate and managed properly.<br />Resources are available to all year. <br />
  253. 253. Why do business with Roach Ag?<br />In business for 30 years – we are not new to the grain markets! <br />We combine a simple, grain selling plan with levels of service (Tiers) developed to bring your farm better ability to market your grain. <br />Our crop insurance carrier provides us the best technology to make sure your coverage is right. ( Mapping, CIMS, Online claims & Marketing plan). <br />Crop Insurance products are all the same from whomever you buy them. Why would you buy a marketing tool from a non marketing agent? Your Roach Ag consultant has a unique set of skills that are difficult to match. <br />We have regional consultants designated for your area (Ogden/Peterson)<br />
  254. 254. Roach Ag Marketing, Ltd. <br />7601 N. Federal Hwy<br />Suite 265-B<br />Boca Raton, FL 33487<br />800-622-7628<br />jroach@roachag.com<br />http://www.roachag.com<br />© Roach Ag Marketing, Ltd.<br />

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