212. 134 BPM PRICE FACTORS The Base Price Factor is multiplied by the MPCI, CRC, or RA base price to determine the BPM added price election. ie: Mpci corn base price of $3.50 X the 75% level factor of .3333 = would equal $1.17 per bushel. Multiply $1.17 cents per bushel times the MPCI guaranteed bushels to determine coverage per acre.
216. Umbrella Policy “UP” 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. 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. 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. 138
229. What is it worth? The 5 Year Ave. of Dec corn during Roach Mar – June Sell Signals = $3.73 The 5 Year Ave. of Dec corn during Oct – Nov $3.07 0.66
230. What is it worth? 175 bpa X 0.66 = $115 per acre
231. Why don’t Farmers Market Grain Aggressively? Yield Risk “I can’t sell what I haven’t produced.” Price Risk “If I sell, Prices might go higher.” Marketing Risk “If I oversell, I won’t have enough money to buy-back my sales.”
232. Roach Ag Planning Process Begins with a Plan for your farm Detailed for consulting clients More general for Basic Level of Service Review of storage, inventory and forward sell ideas
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235. Replaces lost bushels (below guarantee) at higher of February or Fall Price
237. Can be Used to Insure Your Input Costs and forward sales
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239. Revenue Insurance is cost effective for some farms : QUESTIONS? PUTS….? Revenue Guarantee of $576 ÷ 175 bu APH = Net Price Guarantee of $3.29
240. Uninsured Grain Why use Put options to cover bushels we don’t sell? Crop insurance buys you dollars per acre coverage based on (Price X Yield) Put options insure only price – On most farms the greater risk lies in price loss, not yield losses. Options are used in our plan to put a floor under bushels a farmer is not ready, willing or comfortable selling. We average them in at the seasonal high on Sell Signals.
250. Roach Ag marketing example: 200/bu expected yield with 85% coverage on 175 APH 150 bu/acre - Cash/HTA/Futures Contract – RAM chose percentage 25 bu/acre - Non margin plain vanilla puts – Profit 30 cents = $7.50 per acre 25 bu/acre - Sell Call Options - Collected 17.5 cents = $4.37 per acre Strategy earns 50 bushels X 0.66 per bushel = $33 per acre + $11.87 = $44.87 per acre
251. Roach Ag Tier Plans for managing Risk Participate in each Tier based on your comfort level : I . Daily Grain Plan – our basic level of service. Includes a basic marketing plan, Roach Ag Sell Signal alerts for corn, soybeans and wheat. II. Non-margin Put options bought on Sell Signals to insure price on bushels we do not sell ahead. III. Margined Options strategy to help offset Insurance premium. IV. Crop Insurance – completes the risk management core services for Roach Ag to assist you with managing all your farm marketing risk. 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.
252. Roach Ag’s Tool Box for Marketing Grain Plan for selling grain on Sell Signals Option strategy to support unsold grain at higher spring levels. Local crop insurance support to make sure your policies are accurate and managed properly. Resources are available to all year.
253. Why do business with Roach Ag? In business for 30 years – we are not new to the grain markets! We combine a simple, grain selling plan with levels of service (Tiers) developed to bring your farm better ability to market your grain. Our crop insurance carrier provides us the best technology to make sure your coverage is right. ( Mapping, CIMS, Online claims & Marketing plan). 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. We have regional consultants designated for your area (Ogden/Peterson)
