Ag Students Risk Management

Ag Students Risk Management

David Sparks Ph.D.
David Sparks Ph.D.
What future farmers can learn in the College of business and economics. I was talking with College of Busines & Economics professor Dr. Terry Grieb about the ag students who attend his classes and he listed some of the wonderful skills they can acquire. “Risk management has become a critical component of all of the different parts of the ag industry all along the value chain, farm to fork as is often said. It begins with the local producer. When you are in a commodities-based world, you have to think about the value that you can provide. How you can protect yourself from price swings and things that you cannot control and is not part of the value you are providing. That's true for the grower, the crusher, the producer, the distributor, all the way up and down the value chain. That's the thing I am most excited about in terms of the collaboration we are seeing between the College of Business and Economics and the College of Agriculture. We are bringing that perspective to a loss of different parts of the market, in particular with the agriculture side. It's happening in both colleges. If you are a farmer and you have an appropriate use of hedging in the commodity markets, so that you have a great deal of certainty about what your balance sheet and your income statement is going to look like at the end of the year, if you take that to the bank, you are going to get a lot better rate, a lot more access to capital, a lot more flexibility than someone who is not controlling that risk and then can’t say for sure what the results are going to look like.”
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