Program includes unique lab
FARGO, N.D. -- The North Dakota State University Development Foundation is trying to raise $10 million for the NDSU Center for Risk and Trading. Fundraisers hope to secure a permanent endowment for the center -- the only university lab in the nat...
FARGO, N.D. -- The North Dakota State University Development Foundation is trying to raise $10 million for the NDSU Center for Risk and Trading.
Fundraisers hope to secure a permanent endowment for the center -- the only university lab in the nation dedicated to agricultural commodities and biofuels markets. The laboratory was established two years ago and is housed in NDSU's Barry Hall in downtown Fargo.
Commitments before 2014 will qualify for a 1 to 2 state match, officials say. For example, for every $1 million raised, the program receives $500,000 from the state. The North Dakota State Legislature created the Higher Educational Challenge Match for approved projects. Separately, companies that pay taxes in North Dakota can receive a 40 percent tax credit for university endowments.
Jared C. Miller, major gift officer for the NDSU Development Foundation and Alumni Association, says he is working to get the word out.
"For the most part, we're trying to wrap up by the end of the year."
Leaders in the effort will likely be broad-based, from large elevators to independent elevators, implement dealers, commodity traders and farmers.
William Wilson, an agricultural economics professor who was instrumental in establishing the lab, says the endowment system is common for similar labs across the country. There are hundreds of labs for stocks and bonds trading, but only three that have commodities.
Of the $10 million endowment, $5 million would support operations of the trading room -- subscriptions and support. Another $2.5 million would go to a continuing professorship -- an amount to augment salaries of scientists doing research with the facility. The final $2.5 million would support scholarships.
"We want to create four or five fairly costly, high-level scholarships to get students to transfer here to work in these areas," Wilson says.
The lab's functions
The main function for the lab is to increase the level of knowledge and expertise in risk management and marketing sophistication. A high-profile facet is a trade simulation teaching laboratory. The room is used for finance classes in downloading pertinent data and spreadsheets.
Wilson routinely uses the terminals and information from them to acquire data for economic studies, including recent ones for fertilizer production.
"It's very data-intensive because we have international and domestic fertilizer prices, many different kinds of fertilizer," Wilson says. "With a click of a button, the information is there."
A half dozen professors use the lab for price, financial and logistical information.
Frayne Olson, NDSU Extension Service crop marketing specialist, uses the room for outreach activities. He's hosted about 200 farmers, including farmer marketing clubs.
The North Dakota soybean and corn programs have invested funds for intensive two-day training programs, ranging from basic to advanced marketing concepts. These are intensive, two-day programs, allowing farmers to "play on paper" without putting actual money on the line.
"We spend a lot of time talking about fundamentals, what's happening in China, what's happening in Russia," Olson says. "But there's a whole other set of traders who use past price movements as an indicator of what might happen next. The financial community uses that a lot and we now have the financial community coming into commodities -- grains included -- to use as part of their portfolio. If we understand the signals that a group of traders are looking at, it can give us an idea of the price response moving forward."
The facility is also used for three, one-week training programs for the Northern Crops Institute, which promotes northern-grown crops across the world.
Some investors have been approached and have provided positive feedback.
"Generally speaking, there is good support in North Dakota for ag-related functions, because they know how important it is -- how important NDSU is in agriculture," Wilson says.