TitleSustaining Agricultural Business Undergraduate Learning, Research, and Engagement Opportunities Request Date2012-11-27
RequestorWendy Stock Phone7984
Campuses Bozeman Billings Havre Great Falls FSTS Extension MAES
Cross Depts DAEE, ANRS, PSPP
Proposed Dates Start: 01/01/2013 End:  
This proposal seeks base funding to provide continuing experiential learning opportunities for undergraduate students by: (1) offsetting international travel costs for students in AGBE 315 (an interdisciplinary course administered jointly by DAEE, PSPP, and ANRS that provides students with an integrated view of the science, production, transportation, marketing, and end-uses of Montana agricultural products), (2) funding student research, development, and implementation of case studies in AGBE 445, and (3) funding real-world risk management experiences for students in AGBE 421 through involvement in agricultural options markets.
The proposed activities address several objectives from the strategic plan, particularly Engagement, E.2: MSU graduates will have global and multicultural understanding and experiences and Integration, I.2: Increase work across disciplines and I.1: increase the integration of learning, discovery, and engagement.
Funding Type: One-Time Only Funding Base (3-yr Recurring) Funding
  FY13 FY14 FY15 Base ($) OTO Startup ($)   FTE;
Materials & Supplies              
Travel       25000       
Contracted Services              
Other Operations              
TOTAL 25000     
Please comment, if necessary, regarding cost and requirements.

Base funding of $25,000 per year, for AGBE 315 in even years; funding for AGBE 445 and AGBE 421 in odd years.

Describe the Proposal

The Department of Agricultural Economics and Economics (DAEE) has a history of providing experiential learning opportunities for undergraduate students including:  (1) international travel and research experiences, (2) the development and implementation of case studies for use in undergraduate education, and (3) providing experience with critical risk management processes through actual involvement in agricultural options markets.  Currently, funding for these activities is sporadic and ad hoc, leading to inconsistent opportunities for MSU students.  This proposal seeks base funding to expand and provide consistent student opportunities in three different areas:

1.  Agriculture in a Global Context:  AGBE 315: Agriculture in a Global Context is an interdisciplinary course administered jointly by DAEE, PSPP, and ANRS and is taught in even-numbered years based on student demand and faculty schedules (the course is team taught as an overload in addition to faculty members’ usual teaching responsibilities).  The course provides students with an integrated view of the science, production, transportation, marketing, and end-uses of Montana agricultural products.  The course alternates between a study of the global beef cattle and wheat/barley industries.  The beef cattle and wheat/barley industries represent about 80% of Montana agricultural cash receipts annually.  In addition to weekly class meetings, students are heavily involved in field trip experiences throughout the course -- with bench scientists at the genetics laboratory and plant growth center, off-campus experiment station facilities, farm and ranch operations, country elevators, major export terminals, agricultural production and handling operations, and government offices.  Because of its outreach and engagement components with the agribusiness sector, the course has gained substantial “name recognition” among stakeholders, producers, and policymakers in Montana. When focused on the beef cattle industry, the course is commonly known as, “Follow the Beef: Conception to Consumption.”  When focused on the wheat and barley industries, the course is commonly known as, “Follow the Grain.” The course culminates with an international trip to a country that imports or competes with Montana agricultural commodities.  Past courses have incorporated visits to Chile, China, Taiwan, Ukraine, Australia, Argentina, and the EU.  During the international experiences, students visit U.S. consulates and embassies, meet with representatives of multinational agribusiness firms and farmers/ranchers, explore international ports and exchanges, and experience presentations by university faculty who are at the forefront of agricultural research in their respective countries.  The per-student cost of such trips including international flights, hotels, and transportation is approximately $2,500 – which is prohibitively high for many students.  Base funding to partially offset these costs would increase access to global experiences for a wider set of students.  

 2.  Developing and Using Agribusiness Case Studies:  Over the past 15 years, DAEE’s senior level Agribusiness Management Course AGBE 445 has been partially based on case studies that have been written on local and regional agribusinesses.  At least 15 case studies have been developed using agribusinesses such as Wheat Montana, CHS Inc., Coors, and General Mills as the central focus of management decision-making.  In each of these cases, the principal decision-maker of the highlighted company attends the student-led case presentation at MSU, interacts with students in the course, and discusses how he or she responded to the situation described in the case.  These experiences allow students to have direct contact with entrepreneurial management expertise.  Students are exposed to risk and human resource management, product development, technological change, and industrial organization issues that are almost impossible to create in a classroom setting without this direct contact.  The cases are highly time-intensive to develop, as they involve research and data gathering, communication with agribusiness managers, and technical writing.  In odd-numbered years, $20,500 would be used to fund student research stipends to facilitate case study development. Funds would also be used to pay for travel, lodging, and per diem expenses for the principal decision-maker of the company highlighted in the case to come to MSU ($1,500).

3.  Risk Management Experiential Learning in Options Markets:  AGBE 421 Advanced Agricultural Marketing is taught within the DAEE in alternating years.  The primary focus of the class requires a thorough understanding of futures and options markets.  Such issues are critical for the future success of agribusiness management graduates as these markets are commonly used by agricultural producers to manage price risk.  In addition, agribusinesses such as CHS Inc. and Mountain View Co-op routinely use commodity futures and options markets to manage price risks with respect to the transportation and processing of agricultural commodities.  Finally, almost 50% of DAEE agribusiness graduates are employed by agricultural finance firms.  Hence, they require a strong understanding of futures and options markets for making lending decisions.  Although the salient features of futures and options markets are taught in standard lectures, students learn much more about the mechanics and principles of futures/options markets when they actively participate in decision-making processes and observe resulting outcomes.  At the start of the semester, students in AGBE 421 receive instruction on the fundamental elements of price discovery for those commodities most relevant to Montana (e.g., spring wheat, winter wheat, corn, feeder cattle, and live cattle).  Based upon their research, teams of students then present proposals for obtaining a specific speculative position in the options market.  The primary goal, however, is for students to gain real-world experience with using the options market as a hedge against either commodity price decreases or increases depending upon their specific business setting (e.g., whether they assume the position of a wheat producer or a wheat-user).  This experiential learning component requires resources for obtaining an actual market position.  Base funding of $3,000 would be used to obtain a market position.  Market positions are limited to the purchase of a single Put or Call option for one of Montana’s major agricultural commodities.  After interviewing and placing an order with a local commodities broker, the class then follows the path of their position throughout the semester.  As market prices change, reasons for gains or losses in intrinsic and time value are discussed throughout the semester.  Towards the end of the semester, students then decide whether to exercise or sell their option.  Although the option represents a purely speculative position, the basics of price risk management are being taught through this experiential research and learning endeavor.

Describe the broader impacts and benefits of this proposal

Several of the presenters in the AGBE 315 course are active in the agriculture industry in Montana.  Past presenters have included representatives of Burlington Northern (transportation issues and costs), CHS executives (logistics of international trade), and representatives of the Montana Farm Bureau Federation (effects of public policy on agricultural producers). The classroom interactions with industry professionals provide students firsthand experience with Montana’s global agricultural reach.  Additional student access to these experiences will increase student opportunities as well as MSU’s reputation abroad and within the state, and particularly provide access to international experiences for a broader array of students including those from disadvantaged backgrounds who wouldn’t traditionally be able to afford international travel experiences.

This investment in AGBE 445 and AGBE 421 will have a long lasting impact on undergraduate education with respect to risk management, futures markets, options markets, and agricultural marketing. The project will strengthen the agricultural global competence and competitiveness of on-campus and engagement efforts at Montana State University in terms of expanding our global industry and cultural knowledge.

Implementation Plan

The funds for FY 13 would be used to develop agribusiness case study for use in AGBE 445 and for funding the market position in AGBE 421.  In FY 14, the funds would be used to offset travel costs for the next AGBE 315 course (scheduled for spring semester 2014 pending resource availability).  Students in the course will be eligible to apply for the scholarships along with their registration in the course.

Assessment Plan

The courses are part of the DAEE offerings and thus subject to student evaluations and extensive peer evaluations each year. During the student evaluation period, students in AGBE 445 and 421 can be asked for feedback on the case study and market position aspects of the courses. For the AGBE 315 course, class sizes and students’ majors can be monitored to assess whether the funding has provided increased access to the international travel component of the course.

If assessed objectives are not met in the timeframe outlined what is the plan to sunset this proposal?

Sunsetting could happen instantly if the objectives are not met.

Department Head: Wendy Stock (
Dean/Director: Jeff Jacobsen (
Executive/VP: Martha Potvin (