IRWIN POINTS OUT that there are numerous combinations with the matrix. All factors of a grower's operation and marketing philosophy and savvy will impact it percentage wise.

In one example, a grower with preference for risk, who has good pricing skills, is strong financially, believes markets are inefficient, but is undisciplined, might use matrix proportions close to this (see chart):

• Self-directed — 0% mechanical and 25% active.

• Externally managed — 25% mechanical and 50% active.

“Recognizing that marketing discipline is a problem and markets are inefficient, the proportions are heavily weighted toward externally managed strategies,” says Good.

In a second example, a grower with no preference for risk, poor pricing skills, financially weak, believes markets are usually efficient and is a disciplined marketer might use these matrix proportions (see chart):

• Self-directed — 60% mechanical and 10% active.

• Externally managed — 20% mechanical and 10% active.

“The proportions are heavily weighted toward mechanical strategies due to the producer's beliefs about market efficiency, risk preferences and financial position,” says Irwin. “However, since he is a disciplined marketer, the proportions are tilted toward self-directed strategies.”

The value of the matrix mix of marketing strategies can be determined by finding the net price for each comparable pricing allocation and crop year.

“Evaluation must be based on facts, not impressions,” says Good. “Net price received should be a weighted average across bushels priced and adjusted for storage costs and government program benefits. Net price received can then be compared across allocations and to different benchmarks.”

He says market benchmarks measure the price offered by the market. Peer benchmarks measure the price received by other farmers. Professional benchmarks measure the price received by professional marketing services.

Good and Irwin conclude that most growers are “substantially under-diversified” in their marketing programs.

“Diversification across the four cells of the pricing matrix would likely improve marketing performance for these producers,” says Irwin. “Diversification would more than likely also reduce the risk and frustration of making corn and soybean decisions for most producers.”