RMA RME Project Introduction UNITED STATES DEPARTMENT OF AGRICULTURE RISK MANAGEMENT AGENCY PRUNE BARGAINING ASSOCIATION Commodity Partnerships for Risk Management Education Present: Market Risk Education and Information Opportunities RME Topics Prune Bargaining Association Presents Market Risk Education and Information Opportunities PBA District Meetings January 29 – 31, 2008 & February 8, 2008 Topics 1. Market Risks and the Power of Grower Cohesion 2. Case Study: The Prune Industry Since 2003 1. Grower action that leads to better market risk management 2. Evaluation Power of Cohesion – Some Examples • Potato Growers • Pear Growers Potential Market Risks without Grower Cohesion • No field price at harvest • Fracturing industry, more grower packers, inefficiency, loss of profitability • Ineffective response to global competition • Declining significance in world market, loss of market share Case Study of Prune Industry Since 2003 1. The loss of marketing order controls has increased market risks for growers and packers. 2. Some packers and PBA members have not honored their contracts with the PBA. 3. A culture of independence hampers efforts to increase PBA membership and implement more effective risk management strategies. Grower Cohesion Results • More effective business relationships between growers and packers to better share and manage risk • Improved returns and contractual arrangements for growers • Market transparency for growers • An effective industry that increases market share and expands demand Grower Action for Better Risk Management • Be informed. – When growers have a common understanding of the issues they face they are more cohesive. • Pay attention to contracts – don’t sign one-sided agreements. • Market your crop to the best buyer – Which packer is the stronger marketer? • Invest the time needed to be informed & involved – Don’t grow the crop successfully only to fall short of your objective because you didn’t take the necessary time. Summary • Grower cohesion is important to effective management of market risks for prune growers. • The loss of marketing order controls in the industry has created greater risks for growers and packers. • Effective grower action will improve cohesion among producers and allow more effective risk management.
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