Tuesday, January 13, 2009

Why We Teach Agricultural Economics

On the first day of class it is important to articulate why your class is important. Students want to hear specific examples of how their class will benefit them. Here is what I plan to say for my junior level agricultural economics class.

(1) The picture to the right shows a recent Wall Street Journal article titled, "Feeling Flush,...".  A paragraph underneath the title discusses how, months ago when oil prices were unusually high, the CEO of Exxon believed that they were too high and would soon come down. He was right, and consequently, Exxon made tremendous amounts of money. The purpose of this class is to help you the student better understand how and why prices change across time, so that when you become a CEO of a major company, you will make the "right" call just as this CEO did. And don't think the oil industry is irrelevant to your major; energy companies love ag econ students because oil markets behave much like agricultural markets.

(2)  The second WSJ article has the title, "Deal Spreads...".  In the sub-title it says the phrase, "merger arbitragers show more caution."  Do you know what an arbitrager is?  We cover such terms in this class.  Another purpose of this class is to give you the knowledge to read sophisticated articles such as this one. While we largely study agricultural issues, the fundamental concepts are easily transferred to subjects such as mergers. In fact, for every agricultural topic we discuss, we will discuss a non-ag topic.

(3)  Finally there is the Feedstuffs article titled, "Reports of rapid sow liquidation premature...". When an employer hires an ag-business student they expect the graduate to be able to understand not only the title but the entire article. After this class, you will indeed understand this article title and the article content. This is not because I think you will be a hog farmer, but because there is a significant change you will work in an area where you must understand some market. Perhaps you will work for Albertsons grocery store, in charge of tracking pork prices and determining when and what purchases to make. In this case, though you will never visit a hog farm, you must understand the hog market, and must be able to read this article.

Blog Archive