Oakview Farms has come to you for marketing advice. Oakview Farms has $600$ acres of corn and

$600$ acres of soybeans. The farm owns $600$ of the $1,200$ acres it farms and cash rents the remaining

$600$ acres. Oakview Farms has a moderate amount of debt and has been encouraged by its lender to

use more price risk management. For this assignment, you will develop a marketing plan and present

it to Oakview Farms.

Report: Develop a marketing plan for corn and soybeans. You will market the current

commodity and develop and implement a plan for the upcoming production of that commodity

for Oakview Farms. Details for each commodity are attached. Develop a presentation for

enterprises with your recommendations and the expected results. The presentation should explain

what you recommend, why you believe that is the best choice for Oakview Farms, and what the

expected results will be$.$

More specifically, the report should do the following:

$1)$ Sell the current commodities in the cash market and settle up the futures positions linked to the

current commodities. You can pick the amount to sell and the day to sell. Use the Commodity

Challenge site to make the sales and offset the futures positions. Report the time the selling decision

was made and the reported prices from the Commodity Challenge site. Calculate storage costs from

November. $1,2023.$

For each sale:

$1.$ Calculate and report the cash price, the basis, gross revenue from the cash sale, and net return

$($revenues less production costs$).$

$2.$ Calculate any futures or options gain or loss per bushel and in total.

$3.$ Calculate the net price and net return for the enterprise, combining the cash, futures, and storage

amounts.

$1)$ Develop and implement a marketing plan for the upcoming commodities. When buying or selling,

use the Commodity Challenge site.

$1.$ Estimate the cost of production for the upcoming commodities. University of Kentucky budgets

are available through the class Canvas.

$2.$ You may use futures, options, or forward contracts to price the commodities that will be produced.

You may choose to do nothing at this time.

$3.$ Explain your marketing recommendation.

Corn enterprise:

Oakview Farms has $50,000$ bushels of corn available for sale, half is stored at home and half stored at

the coop. The cost of production from last year is estimated to be $$4\mathrm{.}40.$The storage cost on the corn

at home is approximately $$0\mathrm{.}01/$month plus interest at $8\%.$ The coop storage is $$0\mathrm{.}08$ per month plus

interest. The farm valued the corn at $$4\mathrm{.}60/$bu when it was placed in storage on November $1.$ A hedge

of five December corn contracts was sold $5/28/23.$ Oakview Farms plans to sell at least $$25,000$

worth of corn by November $15$ to cover a land debt payment and spring crop costs.

The farmer plans to plant $600$ acres of corn again this year. The expected yield is $160$ bushels per

acre on corn, following soybeans. All $600$ acres are corn following soybeans $(300$ on rented ground,

$300$ on owned ground$).$ The $300$ acres of the corn ground that is owned has a $$123/$acre cash cost for

land debt and taxes. The rented ground has an average cash rent of $$180$ per acre. All other

production costs match those reported in Kentucky Extension$$s budgets.

Soybean enterprise:

The farmer has $20,000$ bushels of soybeans in storage, half at home and half at the coop. The cost of

production from last year is estimated to be $$10\mathrm{.}54.$ The expected storage cost on the soybeans at

home is approximately $$0\mathrm{.}01/$month plus interest at $8\%.$ The coop storage is $$0\mathrm{.}08$ per month plus

interest. The farmer valued the soybeans at $$12\mathrm{.}50/$bu when they were placed in storage on

November $1.$ A hedge of two January soybean futures contracts was sold on $5/28/23.$ The farmer

plans to sell at least $$25,000$ worth of soybeans by November $15$ to cover a land debt payment and

spring crop costs.

The farmer plans to plant $600$ acres of soybeans again this year. The expected yield is $56$ bushels per

acre. All $600$ acres of soybeans follow corn $(300$ on rented ground, $300$ on owned ground$).$ Owned

land has a $$123/$acre cash cost for land debt and taxes. The rented ground has an average cash rent of

$$180$ per acre. All other production costs match those reported in Kentucky Extension$$s budgets.