AFRE course project informs investment decisions
Print
EmailFinancial management in ABM 435 covers balance sheets, income statements and capital budgets. But its culmination in a real-world scenario analysis can have six-figure impacts on Michigan agribusinesses.
by Christine Meyer
Financial management in ABM 435 covers balance sheets, income statements and capital budgets. But its culmination in a real-world scenario analysis can have six-figure impacts on Michigan agribusinesses.
As juniors in 2012, Zack Snider and Caleb Herrygres were members of a four-person group that examined whether a front loader should be purchased for the Herrygres fruit farm. The group spent weeks analyzing things such as the farm’s income statements, balance sheets and available capital, along with the price of the loader and maintenance costs. They ran various scenarios and concluded that the business could afford the equipment. But was it truly the best use of the farm’s money?
“Everyone contributed and our group got along really well,” Snider said. “We concluded that it wasn’t a good idea to buy this loader” because the farm could make more by investing the funds elsewhere and earning interest.
The success of that group project emboldened Snider to do a more in-depth independent study his senior year using an investment idea from his own family farm, a large grain operation that also raises turkeys and pigs. This time, Snider was asking whether his family should invest $350,000 to buy more corn bins and a bigger dryer.
Unlike the simpler ABM 435 project, “there were a hundred different things that went into this one,” he said. “My spreadsheet was very, very extensive and I’d change one or 10 or 30 different things and see what the possible outcomes were. I would have never been able to do the second project if I hadn’t done the first one.”
This time, Snider concluded that the purchases were a good investment but, “now I’m just trying to convince my dad,” he laughed.
Snider’s experience is exactly the sort of initiative that Roy Black and Jim Hilker, professors in the Department of Agricultural, Food and Resource Economics (AFRE), are trying to foster in the department’s upper level undergraduate students.
“Our focus has been to develop capstone experiences where students are synthesizing various courses and experiences,” said Black, who has been part of ABM 435 for 20 years. “Employers tell us they are looking for people who can think, so we’re trying to give students experiences like they might have in the working world.”
Both professors concede that many students dread group projects. But they have structured the capstone assignment to provide a rewarding and successful experience. For starters, Black picked the groups – last year there were 17 – with an eye toward balancing the strengths and weaknesses he’s observed in the students through the first part of the course.
Black said the team rules are one of the most important components of a successful experience. To start, the group picks a leader who will steer them through the process of picking a topic, assigning jobs and making team rules. If a group member violates the team rules, he or she can be dismissed from the team and be forced to do his own project. The project concludes with a paper, an oral presentation in front of a faculty panel and group meetings with the professors.
“We like to think we have a program that is more than just a group of courses,” said Hilker, who is also AFRE’s undergraduate coordinator. “Each student is a little different in how they go about it. Some kids really love projects. They love to think and they’re curious.”
