Virginia Tech helps Virginia producers understand commodity markets
Virginia producers depend on their abilities to analyze and form price expectations in order to make successful commodity marketing decisions.
Commodity marketing information, including situation and outlook analyses, was the top training need, according to a 2016 professional development assessment of Virginia Cooperative Extension agents. The Department of Agricultural and Applied Economics launched the Virginia Commodity Marketing website as a free resource for Virginia producers to address this need.
The website will provide timely and relevant commodity market information that can facilitate marketing decisions by producers, agribusiness firms, and Extension agents in their outreach efforts.
“While commodity marketing information is readily available in the main production regions of the Midwest, marginal production areas like Virginia have suffered from the lack of such information. This lack of commodity marketing information puts Virginia crop producers at a disadvantage relative to their more informed counterparts with respect to their ability to successfully market their products,” said Olga Isengildina Massa, the John B. and Kristi L. Rowsell Professor.
“That is an important part of the work we are trying to do here at Virginia Tech — to ensure that we provide our producers with the tools they can use to increase their markets and ultimately their profitability,” said Mike Gutter, director of Virginia Cooperative Extension and an associate dean of the College of Agriculture and Life Sciences.
The website showcases two main agricultural industries: feeder cattle and feed grains — corn, soybean, and wheat. It includes the following information per industry:
- Cash prices: Cattle auctions and grain locations to collect cash and new crop grain bids
- Futures prices: National trends in futures and current prices
- Basis and basis patterns: Create price expectations based on the futures market to inform marketing and risk management decisions
- Insurance: Information to see how much it would cost to purchase a Livestock Risk Protection policy for cattle
- Hedging strategies: Price forecasting tools for operational strategies
- Target price calculator: Helps producers understand what their cattle or grains are worth
“The feeder cattle section of the Virginia Commodity Marketing website helps to bolster the bottom line of Virginia cattle producers in two ways. Marketing and price trend information coupled with the powerful target price calculator help producers capture the highest value for their animals. Price risk management strategies protect that value from being eroded by the volatility of the market. We’re excited to put these tools in the hands of Virginia cattle producers, and hear how they can continue to be developed,” said Elijah Griles, commodity specialist for agriculture, development, and innovation with Virginia Farm Bureau Federation.
Griles graduated with a master’s degree in agricultural and applied economics in 2022 and hosts CattlePulse, a Virginia Farm Bureau podcast, that discusses market updates about Virginia's commodities, including grain and cattle.
"Production margins for crop farmers seemingly tighten every day with higher input and operating costs. Many parts of the crop production cycle are out of the farmers' hands, so it is essential to control what factors they are able to, such as grain marketing. The website offers producers an inside look at Virginia's grain basis historical trends, seasonality, and a target price calculator that uses this historical data. It also offers hedging strategies that producers can utilize and a real-world hedging simulation that returns positive results for Virginia farmers. This website is a great opportunity for farmers to bolster their profits and increase the economic well-being inside the farmgate," said Jayson Gill ’23, grain originator with Perdue Agribusiness.
Gill’s research was supported by a National Needs Fellowship sponsored by the U.S. Department of Agriculture's National Institute of Food and Agriculture, which provides support for training outstanding master's and Ph.D. students with broadening scientific and professional expertise in commodity markets.
The project was made possible by the support of its partners:
To learn more, visit the Virginia Commodity Marketing website.