Agricultural Commodity Risk Management
Students interested in exciting career opportunities in trading commodities, merchandising or managing cattle, dairy or grain elevator operations will benefit from a new University of Idaho program focused on commodity risk management. The new Agricultural Commodity Risk Management program allows students to learn how to manage the risk involved in commodity marketing and trading throughout the agricultural supply chain in order to maximize profits.
Commodity markets are essential to Idaho and the nation’s economies. The study of the price dynamics, market structures, costs of production, profit margins and market participant’s behaviors are essential for students seeking a career in agribusiness, agrifinance or who wish to be managers of their own farm or ranch.
Students in this program trade actual commodities with real money under the guidance of faculty in the Department of Agricultural Economics and Rural Sociology and in the College of Business and Economics Barker Capital Management Trading Program.
Students completing the curriculum will be able to:
- Analyze the life cycle of a commodity
- Develop and implement hedging strategies
- Understand the mechanics of trading futures, options and spreads
- Analyze supply and demand factors — locally, regionally and globally — to develop strategies
- Risk manage the supply chain from farm to fork
Program participants utilize the state-of-the-art Barker Trading Room, which replicates an open trading floor environment and fosters peer-group learning opportunities. Other resources include on-site Bloomberg terminals, regional agricultural price data and industry-standard futures trading platforms.
Students also benefit from direct involvement with the agricultural industry. Field trips to local cooperatives, marketing centers, commodity merchandising firms and export terminals introduce students to real-world experiences, complemented by opportunities to explore a career path through industry internships.
Many students also participate in regional and national academic competitions related to commodity markets such as the Barker Trading Competition, the CME Group Trading Challenge, the ThinkorSwim (TOS) Challenge and others to gain additional practical trading experience.
- The only individually funded program in commodity trading and hedging in the nation.
- 100% placement rate for students with an ACRM Certificate.
- Graduates have taken career positions with major international commodity brokerage, merchandising, financing and logistics firms.
- ACRM certified students are achieving higher than market-rate entry salaries.
12 credits required
Two of the following:
- AGEC 489 Understanding and Using Futures and Options Markets (3 credits)
- AGEC 414 Financial Analysis of Agricultural Firms (3 credits)
- AGEC 490 Price Analysis (3 Credits)
One of the following:
- FIN 465 Introduction to Market Trading (3 Credits)
- FIN 466 Market Trading Strategies (3 credits) OR,
- AGEC 489, AGEC 414, AGEC 490 (if not taken under requirement 1)
At least 3 credits from the following:
- AGEC 468 Commodity Merchandising (1 cr.)
- AGEC 469 Commodity Trading (1 cr.)
- AGEC 489L Applied Commodity Market Analysis Lab (1 cr.)
- FIN 467 Barker Capital Management Group (max 1 cr.)
- FIN 468 Market Trading Lab (1 cr.)
Quotes from Industry Professionals
“In today's world of market volatility and uncertainty, it is becoming increasingly important to manage commodity price risk. The University of Idaho is addressing a real need in the industry with their new and unique Agricultural Commodity Risk Management curriculum.
The program is structured with a "hands on" approach using real money and managing actual commodity positions. This experiential learning will be an asset to any employer looking for graduates who understand commodity risk management and its application in real world situations.”
“As one of the trade directors for a fairly large grain company, we find it very difficult to find graduates who come out of school with "real life" knowledge. This risk management program is the first that I've been associated with that does exactly that, by giving students a strong knowledge of real life trading.
Having an understanding of risk management strategies as they relate to individual markets and the drivers of those markets is invaluable. I've talked to many students coming out of this program and am amazed at the grasp they have of individual markets, fundamental and technical analysis, supply chains, transportation, and most important, how to use this knowledge to make money.
There is a huge benefit for any company hiring a student coming out of this program due to a much shorter learning curve which allows them to be productive so much sooner and with less training costs on the front end.”
Students Learn the Art of the Hedge
U of I Cattle Drive student team rounds up second place in national trading contest