MEETING THE CRITICAL NEEDS FOR TARGETED MARKETING AND RISK MANAGEMENT STRATEGIES FOR IDAHO GRAIN PRODUCERS

Grain producers face a plethora of risks due to weather disturbances, policy changes, uncertain input and output prices, supply chain disruptions, trade conflicts, and various fundamental or speculative drivers. In a recent large-scale survey in Nebraska, a state with farm systems like those in Idaho, farmersidentified price, marketing, and profitability as the top three challenges to the success of farm operations over the next 5-10 years (Lubben, 2020). Survey results highlighted that in the longer run, producers were most concerned about price volatility, and whether they could effectively market their products at price levels that maintain profitability and allow their businesses to remain competitive. This concern was corroborated by a recent study showing that managing price risks are critical for farm survival (Wu and Turvey, 2020). In particular, farm bankruptcies were negatively affected by farm output prices, with a 1% decrease in producer prices associated with a 2.62% and 3.70% increase in farm bankruptcy rate and farm bankruptcy number, respectively (Wu and Turvey, 2020).Risk management involves choosing among alternatives to reduce the probability of detrimental economic outcomes for a farm business (ERS, 2000). Various risk management tools have been developed to help producers overcome the adverse impacts of price and market volatility, such as crop insurance, futures and options contracts, forward sales, deferred payment contracts, and risk-balancing (Crane et al., 2013, Franken et al., 2012, Velandia et al. 2009). Despite the research and outreach efforts in other states and on a national scale, Idaho grain producers lack a systematic understanding of existing marketing and risk management practices and whether these tools can serve their needs, given the rising market and price risks that have become predominant over the past few years.Crop prices have been highly volatile over the past two decades. Although grain prices have enjoyed a rapid run-up since the beginning of 2021, producers were dealing with a multi-year price downturn due to trade conflicts, competition from other exporting countries, and the declining demand at the beginning of Covid-19. The related market losses challenged producers; many farmers struggled with loan payments and farm bankruptcy in 2019 reached the highest level since 2010 (Farm Bureau, 2020). The heightened volatility has created significant challenges for many grain producers regardless of their size, management structure, and location, making this proposed research and extension integrated project particularly timely.The agricultural sector is Idaho's greatest economic contributor, accounting for 20% of the state's gross domestic product (NASS, 2022). Of the various types of grain produced in Idaho, wheat and barley are the two most important. Data from the USDA National Agricultural Statistics Service (NASS) showed that in 2020, the value of Idaho wheat production exceeded $576 million, the highest among all grains (NASS, 2022). Wheat is grown in nearly all counties in Idahoand is the state's second-largest crop regarding cash receipts after potatoes. Nationally, Idaho ranks 5th in total wheat production, and 1st in soft white wheat production.Meanwhile, farmers in Idaho harvested 55 million bushels of barley, which generated over $270 million in revenues and accounted for 32% of total barley production in the US (NASS, 2022). Due to increasing dairy and livestock production over the past two decades, corn has enjoyed rising popularity among grain producers, particularly in the southwestern and southcentral parts of the state. High fluctuations in grain prices pose significant threats to farm revenues, employment, and, due to the described economic importance to the state, Idaho's economy.The proposed project will generate the much-needed information to help Idaho grain producers prepare for, adapt to, and overcome the rising marketing and risk management challenges in farm operations. Specifically, we will 1) identify critical marketing and risk management factors that determine success and failure, 2) translate the success and failure lessons into adoptable practices by developing decision aids and tools that Idaho grain producers can readily implement, and 3) develop and deliver community outreach programs to assist Idaho grain producers in implementing successful marketing and risk management practices for improved profitability, resilience, and viability.