Case Studies

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North Dakota State University

AG ECON 444: Crops Marketing

The Need

AG ECON 444 is part of the agricultural economics undergraduate course of study at North Dakota State University (NDSU). Taught by Professor William Wilson, this class focuses on the management, marketing and financial aspects of agriculture production and resource decisions.

Professor Wilson wanted his agricultural economic students to better understand how to use futures, options and spreads to manage the price risk associated with crop production. The university also wanted to use trading software to help farmers in surrounding states explore how they can use exchange-traded derivatives to help manage price risk.

The Engagement with TT

Professor Wilson became interested in using Trading Technologies’ software after speaking with representatives from Tulane University. Tulane joined the TT CampusConnect® program in 2007 and uses TT software in its Master of Management in Energy (MME) program.

Trading Technologies’ X_TRADER® was installed in NDSU’s Commodity Trading Room (CTR) in 2009. With 34 work stations, the CTR replicates a professional trading desk, making students feel as if they’re part of the market and not in a class.

In addition, X_TRADER was incorporated into AG ECON 444 to help students experience live commodity markets and execute trades in a simulated environment.

In 2015, Trading Technologies provided NDSU with access to the TT® platform. The web-based software requires no installation and can be accessed through virtually any internet-connected device, allowing students to use the platform and complete assignments outside of the CTR.

The TT platform also was embraced by NDSU’s Extension Service, which uses it to help educate farmers in North Dakota about how they can use the futures and options markets to hedge against grain price volatility. The farmers are given access to the platform and are able to interact individually with the markets in a simulated trading environment, which helps them clearly understand how hedging can impact their business and profits. Because these interactions occur off campus, the web-based nature of the software is essential.

NDSU also uses TT with the Northern Crops Institute, which promotes the agricultural industry of the four-state region that includes North and South Dakota, Montana and Minnesota. Twice a year, growers, processors and other agriculture professionals from around the world come to NCI to learn about the latest industry trends, practices and products. Trading Technologies has spoken at NCI about the importance of price risk management and how TT software can be used to facilitate the process.

The Result

The demand for talent in agricultural commodity marketing is strong. As stated by Professors Wilson and Frayne Olson in TT CampusConnect: Growing the Next Generation of Commodity Marketing Professionals at North Dakota State University, “Indeed, some firms have indicated that their growth is limited only by their inability to hire enough well-qualified individuals.”

By leveraging the TT CampusConnect program, NDSU is delivering a pipeline of highly qualified commodity marketing specialists who are very much in demand. To quote Professors Wilson and Olson, “Most (NDSU) students in this field will have internships for two years, be in the top 20% of the class and have a deep interest in the topic—and most will have offers by November.”

But NDSU’s efforts to educate don’t stop when students graduate. By using TT software in NDSU’s Extension Services and the NCI, the university teaches agricultural professionals about how to hedge their crops by establishing positions in the grain markets.

“In all cases, the goal is to expose participants to [both] the massive amount of information available in the market—including cash, futures and option prices—as well as state-of-the art mechanisms for managing risk and executing trades. Thanks to the software provided by Trading Technologies through the efforts of the TT CampusConnect program, we are able to excel in achieving this goal.”