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 onsite 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.
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ACRM alum Brett Wilder ('17, B.S. agricultural economics; '19, M.S. applied economics) is an assistant professor and area Extension educator in farm business management for the Department of Agricultural Economics and Rural Sociology at the University of Idaho.
Coming to the University of Idaho, Brett had no background in trading, risk management or market analysis. Learning about trading challenges, a Portland grain tour class trip, and being able to use the skills learned to earn real dollars piqued Brett's interest in the program.
"I will never forget participating in the ThinkorSwim Challenge for the first time. Together with a group of three other CALS students, we applied fundamental analysis tools learned from CALS faculty and the trading strategies learned from the CBE faculty to trade equity options during the October earnings session. Never in my life have I learned so much about a subject in such a short time."
Their team won second place in the nation that year, bringing home $20,000 which they used to establish the CattleDrive Endowment along with additional funds from CALS and CBE. These experiences continue to contribute to Brett's career success.
"I've learned to view all things in terms of 'optionality' — i.e., how I can position myself in both business and in life to prevent downside risk and take advantage of upward opportunities.”
Brett's advice to students considering the ACRM program is to get the most out of the experiences offered.
"Lessons learned will come in handy in everything from making better decisions on your home operation, understanding market movements, handling your personal retirement/trading accountings, and positioning yourself strategically to take advantage of volatility, rather than being taken advantage of by it."
Ron Rowan, director of Beef Northwest Feeders
“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.”
Todd Strayer, director of Western Grain and Oilseeds — The Scoular Company
“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.”