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Measuring Program Effectiveness - Improving Grain Marketing Knowledge
by E. Joseph Beiler

Extension agents and specialists have made many program and evaluation efforts to improve farmers' grain marketing skills. The evaluation effort described in this article was designed to find out how much farmers learned about grain marketing techniques in programs sponsored by Ohio Cooperative Extension Service (OCES) the past four years in Mercer County, Ohio. We were interested to see if the programs had helped increase these farmers' average price of grain sold as compared to the average price of all grain sold in Mercer County. Another purpose was to determine what topics in grain marketing should be taught in the future, and at what competency levels.

Marketing Questionnaire

In June 1984, we sent a four-part questionnaire to 80 farmers who had participated in the Mercer County Extension programs on grain marketing since August 1980. Section A in Part One sought information on what had been learned from the topics taught using the following scale: "0 " = knew nothing to "4 " = very high level of understanding. Section B explored the level of competency the participants wanted to achieve through future training on each topic. "0 " meant that the participant didn't want any more instruction, "1 " that the participant wanted the teaching/learning process to start from the basic level, and "4 " that the participant wanted the topic to start at an advanced level. Part Two explored the level at which participants wanted to begin a more advanced marketing program, using the same scale as Section B of Part One. The questions in Part Three were designed to find out which of the taught skills farmers were using and the amount of improvement they'd realized in the price received for their grain as a result of taking part in the program. The fourth section of the questionnaire was optional, asking for background information on the participants' farming of the major grain cropscorn, wheat, and beans. We mailed follow-up questionnaires and made telephone calls to encourage the return of the questionnaires. Sixty-two completed questionnaires (77.5%) were returned. Two of these weren't properly completed, leaving 60 usable questionnaires (75%). Miller and Smith's double-dipping procedure was used to investigate the nonresponse cases in the study.1 By random sampling, five (27.8%) of the nonresponding subjects were selected and interviewed using new questionnaires. Examination of the data comparing these nonrespondents and the respondents found no significant difference, permitting us to generalize about the remaining nonrespondents, who then numbered 13 (16% of the target population).

Study's Objectives

The first objective was to determine how much of the teaching of grain marketing was understood and adopted by the participating farmers. After analysis of the responses, questions yielding a mean average above 3.0 were interpreted as representing the topics with which the majority of the participants were most confident. These were: how to figure cost of production, how to use delayed price, the need for marketing information, and the relationship between supply and demand. The respondents were fairly confident with the next group of topics (reported mean averages between 2.55-2.93). In order, these topics were: developing a market plan, using forward contracting, charting local basis, marketing one crop over a two-year period, and finding marketing information. The respondents gave the topic, "How To Use Basis Contract, " a mean score of 2.31, indicating that the topic was partially understood. The least understood topic according to participant response was "How To Use Hedging, " with a mean score of 1.69. We interpreted this to mean that a low level of learning was achieved. Table 1 summarizes the information received on the adoption or practice of methods learned by the participating farmers. The response indicated that 93.9% had improved the average price received for grain over the year. They indicated they improved their return by an average of 24.9 cents/bushel on corn, 26 cents/bushel on wheat, and 44.6 cents/ bushel on beans. This average was determined by comparing the average price they received for the year to the average price paid to all farmers in the county for each marketing year. For example, if a farmer received $2.48/bushel when the average price for the county was $2.53, the farmer was -.05/bushel. The next year, after completing the course, if he or she received $3.35 and the county average was $3.15, the farmer was + .20 over the county average, and + .25 over the year before. The farmers were supplied with the average price of all grain sold in the county for 1980-81, 1981-82, 1982-83, and 1983-84 marketing years. They then compared the average price they received to the county average and determined their year-to-year difference for each crop. The second major objective was to determine the level of training needed in the future. On the basic grain marketing topics, a very high correlation existed between responses for learning and needed knowledge-that is, those questions with a high mean average for understanding also had the highest mean average for training needed. This indicates that no additional training is needed or that training should start at an advanced level in all but two topics. The responses on how to hedge and delay price categorized respondents in two groups. If they understood these concepts, they said no additional training was needed. If they didn't understand, they desired the training to begin at a low competency level. The mean scores on the other remaining skills indicated that training should be started midway on the competency scale (between 2 and 2.49 levels). Another objective was to determine the level of study for advanced marketing information desired by the clientele after completing the basic level programs in grain marketing. Apart from the topic areas of marketing options, price forecasting, and foreign trade (with means of 2.08, 2.11, and 2.02 respectively), all remaining items had means of less than 2. The least understood of the topics, in descending order, were: trailing hedge, integrating computer with market, use of spreads, and rolling a hedge, all with mean scores under 1.31. Respondents, on the average, seemed to want the program to start at just above the basic level, except for the three topics that scored above 2. The response to the marketing options question may be confounded because marketing options may also refer to a type of sale and not to options on the Board of Trade.

Table 1. How farmers indicated their use of marketing techniques.
Never Once Few Often Forward
contract 15.0% 6.67% 38.3% 40.0%
Basis contract 63.9 1.60 26.2 8.2
Hedge 68.2 1.58 22.2 7.9
Delayed price 20.3 3.39 50.8 25.4
Rolled a hedge 86.4 1.69 11.8 0.0

The background information indicated that the respondents were a cross-section of the grain farmers in Mercer County. Farming experience ranged from one to 60 years, with most falling in the 10-20 year range. The study showed that the farmers who attended grain marketing programs learned how to use the basic skills well, although the understanding of hedging and basis contract was low. This could be due to the lack of elevators offering a basis contract (only two out of eight major ones do), not hedging because of the lack of a nearby broker, or not selling enough grain of one kind at a time. The training needed correlated well with what has been taught and showed what areas should receive more attention. This study indicated Extension in Mercer County is accomplishing its goal of improving marketing knowledge. Participants learned they can improve their marketing skills and thus improve their income. Extension marketing programs do make a difference for Mercer County farmers.