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Abstract

Marketing is viewed as an important component of the farm management process, and poor marketing is often cited as a cause of low farm incomes. However, widespread beliefs about poor performance are not based upon a large body of research, and available evidence is too limited to make definitive conclusions about farmer marketing abilities. This paper examines the actual marketing performance of corn and soybean producers in Illinois. Farmer marketing data is based on the USDA's "Average Producer Price Received" over the period 1975-2002. Marketing performance is assessed using 20- and 24-month average price market benchmarks. A comparison of farmer prices received to the price range for each crop year reveals that in the majority of years producers market their crop in the top- or middle-third of the price range. Despite these findings, farmer prices fell below the average price offered by the market in most normal crop years; weighting these shortfalls by actual production reveals substantial, avoidable income loss. In short crop years, however, farmer prices exceeded the market benchmarks for both crops. Observed farmer marketing performance is explained in the context of price and marketing patterns; farmers appear to market too much of their crop in the latter part of the marketing year, when, in most years, prices are at their lowest. Shifting a portion of sales to the pre-harvest period is proposed as a likely means of improving farmer marketing performance and easing avoidable income loss.

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