A $4 million investment with a $130 million return — those beefy figures describe the highly successful Cooperative Extension economics program known as Master Marketer.

Celebrating its 10th anniversary in 2006, this risk management education program started at Texas A&M University before expanding to the University of Minnesota. Master Marketer workshops have also been held in South Dakota, and the Montana Grain Growers Association has conducted several full programs.

Master Marketer involves 64 hours of intense marketing training for growers who have some knowledge of using futures and options. More than 700 people have been through Master Marketer in Texas. Another 450-plus are Master Marketer grads from Minnesota.

The tremendous value of the program is illustrated by how it has helped the bottom line of its producer students.

In Texas, the average increase in revenue of these growers was more than $32,000/year. Strong increases in profit have also been seen in Minnesota and other states.

“Students learn how to develop marketing plans, evaluate marketing alternatives, manage production and price risk and execute a risk management and marketing plan,” says Steve Amosson, Texas A&M Extension economist, who started the program in 1996.

Edward Usset, Minnesota Extension economist, adds that Master Marketer is different from other marketing education opportunities.

“For too many producers, marketing education is a one-hour presentation on the outlook for grain prices, or a two-hour introduction to the latest options strategy,” says Usset, who worked with Amosson to initiate the Minnesota program in 1999. “A Master Marketer program distinguishes itself with a higher level of intensity, a broader scope of topics and a deeper level of experienced speakers who travel far to be part of the program.”

Of those participating, 90-95% of the Master Marketers are growers, including many spouses. Others in the classes include ag lenders, Extension personnel and those with an interest in commodity marketing.

Instructors are not limited to A&M or University of Minnesota economists. Other university grain, cotton and livestock marketing economists add their expertise. So do representatives of the Chicago Board of Trade, Chicago Mercantile Exchange, Kansas City Board of Trade and other private commodity companies.

“Two examples of the great expertise we attract from outside Minnesota are Robert Wisner and Elwynn Taylor of Iowa State University. Their depth of knowledge is unsurpassed in the areas of grain marketing and climatology. It's great for our Minnesota producers to share in their insights,” says Usset, noting that his program has even crossed into South Dakota Master Marketer ventures.

Amosson says growers “like being exposed to quality instructors, the subject matter that is taught on a very applied level and the interaction with other producers.”

Amosson started 2006 Master Marketer classes in January. Participants applied for enrollment through their local and regional Extension office. Each class has about 50 students. Some are straight corn, wheat, grain sorghum producers. Others have corn, soybean, wheat and cotton rotations, or run stocker cattle on their farms.

Usset started the eighth year of Minnesota Master Marketer in January. “Producers have to remember that the Master Marketer program is different from other marketing education opportunities,” he says. “We cover basic and advanced marketing strategies using futures and options, fundamental and technical price analysis and the role of crop insurance in marketing. We also look at climate trends and impacts, key elements of a solid marketing plan and marketing clubs.”

The establishment or revitalization of marketing clubs is a key segment of the overall program concept. In Texas, Master Marketer grads have started or revitalized more than 100 marketing clubs across the state. Dozens more have been formed in Minnesota.

“Efforts by our graduates to develop marketing clubs have been and will be critical in increasing marketing and management skills of a much larger number of producers,” says Amosson.

Richard Owen of the Montana Grain Growers Association says the program, coordinated with assistance from Texas A&M, did a good job in making better marketers out of its participants. Duane Griffith, Montana State University Extension economist, says Master Marketer workshops have helped promote marketing clubs in his state. “The program helps marketing clubs stay active,” he says. “The clubs keep producers involved in the marketing process year-round.”

Usset and Amosson see a strong need for more advanced marketing training for growers, who usually do a better job of producing their crops than they do selling them.

“The producers who remain in business today have a good handle on production, and the best of them understand that the next decade will challenge those who can't master the art of grain marketing,” says Usset. “The Master Marketer program is dedicated to helping producers become better at pricing their grain.”

Unfortunately, producers haven't done as good a job in marketing their crops, Amosson adds. “It may be because the income security of past farm programs has not required them to hone their marketing skills, or the fact that marketing is usually not a black-or-white decision but various shades of gray.

“I believe most producers could increase their gross 5-10% by improving their marketing and risk management skills, with virtually all of that increase going to net income,” he says.

Amosson and his associates have consistently conducted two-year post-graduate surveys of producers. “The results have been far more than we expected and very consistent over all the classes surveyed,” he says.

“Our graduates average $32,370/year more in sales based on what they learned and implemented from the training. That's a 3.6% increase in sales. When you consider that includes some that reported no impact because they still didn't feel comfortable marketing, I consider that impact remarkable. Many times $32,000 can make the difference between having a profit or loss.”

Amosson stresses that since growers can apply the Master Marketer training year after year, long-time returns can be even larger. “I have producers from the first class, which was 10 years ago, tell me that they are still using what they learned,” he says. “If you consider that say, 75% of the producers are in business more than 10 years, the total increase in the income of all graduates would be more than $130 million.”

Usset says the University of Minnesota surveys of producers who have completed the Master Marketer programs indicate the bottom line impact has been up to $12,000 per year for their operation.

He says the concept behind Master Marketer is solid and transferable to any state that wants to establish similar programs.

“It takes a great deal of effort and cooperation to pull together a Master Marketer program,” he says, “but the response from past participants is so overwhelmingly positive that we continue to make it happen.”

Even with its success rate, Master Marketer hasn't spread nationwide, due mainly to tight budgets and the shortage of personnel at some locations. The Texas program has received extensive financial assistance from state commodity groups, which helps sustain the progress of the program.

“In defense of other states, most Extension services are stretched so thin they don't have the critical mass of personnel to pull off this type of program without an influx of external funding,” says Amosson. “We are grateful in Texas for the support we have received from our commodity groups.”

For more information on the Texas A&M Master Marketer program, go to http://mastermarketer.tamu.edu/. A University of Minnesota Master Marketer brochure is available at www.cffm.umn.edu/workshops/mmmp.aspx.