21 Feb Career Profile: Agricultural Economist
Growing up in a small town is not conducive to stumbling upon an agricultural economist on every corner. I wanted to be a veterinarian. In digging through some old papers the other day, I chanced upon my acceptance letter to Texas A&M University, thoughtfully written and signed by the College of Veterinary Medicine and Biomedical Sciences. I reveled in daydreams of working with ranchers to maintain the health of their herds. I diligently plotted out my future career and eventual financial success. Classes began. I stepped into a cavernous room with stadium seating filled with hundreds of other wide-eyed young academics . . . Chemistry 101. I took notes for about twenty minutes. Then I thought, “You’d better find something else to do, and fast.”
That painful realization of my inadequacies in the hard sciences led to a change of study, and ultimately a change in the course of my professional life. I pursued a degree in agribusiness, and the classes I took in agricultural economics have proven beneficial in most of the jobs I’ve ever had. Ask students of agricultural economics “why?” and they will tell you it’s because economics is a social science, a theoretical study of real human behavior. Applying concepts to something concrete like grain prices or break-evens for a beef operation lend legitimacy to the lessons, something you just don’t get with widgets.
While economics affects us all and is therefore a subject worth studying, it is possible to make a living as an agricultural economist. From commodity markets to land prices to international exchange rates, the field encompasses the endless variables that can drive prices and have macroeconomic implications. An agricultural economist must constantly study the distribution of resources and how that distribution changes across time and space.
One of the first things taught in an introductory agricultural economics course is the concept of ceteris paribus, Latin for “other things equal”. Essentially, to understand how one variable affects something, it is helpful to isolate that variable in a vacuum. While this is important for understanding things like supply and demand elasticity, nothing ever remains stagnant in a market. Weather, foreign events, government policy, and countless other factors determine the price and availability of agricultural goods and services every second. An agricultural economist knows this, and is therefore prepared to deal with the diverse nature of the job.
So what does a day in the life of an agricultural economist look like? We asked Kevin Good, Senior Analyst at CattleFax. For students or young professionals interested in having a job that provides variety, the good news is that there is no “standard day”. Markets are constantly evolving, and CattleFax must be fluid in its analytical methods to maintain their commitment to providing their cow/calf, feeder, and agribusiness customers with accurate and relevant data and recommendations. That said, we were able to construct a hypothetical schedule that represents the type of work an analyst at CattleFax might encounter on a hypothetical Monday in Colorado.
AN ANYTHING-BUT-NORMAL DAY
7:00 a.m.: Arrive at the office. Fill coffee mug to the brim and walk carefully to the computer. Thank the lucky stars that the world has folks interested in coffee as well as cattle.
7:15 a.m.: Check the overnights in the markets. Pay close attention to the grain markets, as trade has been volatile ahead of USDA putting out the WASDE report this week.
7:30 a.m.: Markets open (8:30 a.m. CST).
7:45 a.m.: Respond to emails from a feedlot customer in Kansas asking about the latest Cattle on Feed report.
8:00 a.m.: Work on data mining project using the approximately five million head of cattle in the CattleFax database. Refill coffee.
9:00 a.m.: Weekly meeting with all analysts. Several key reports are coming out this week, and all hands are on deck to assist clients with risk management decisions.
10:00 a.m.: Continue data mining and analysis.
11:15 a.m.: Receive phone call from a feedlot customer. Talk about fundamentals and how your technical analysis plays into overall strategy. Explain why you think basis will soften over the next two months.
11:45 a.m.: Receive a request from a group wanting a general outlook presentation next month. Talk about the what issues are important to the organization’s members and agree to present.
Noon: Lunch. Beef. And maybe a salad.
12:45 p.m.: Back in the office. Respond to more emails.
1:00 p.m.: Work on putting together a weekly update that goes out to customers.
2:45 p.m.: Time for a coffee refill. Another analyst focused on grain catches you in the hall and wants some information that will help him with a recommendation he is putting together for a client. The two of you go back to your desk and work through it.
3:30 p.m.: Your colleague’s question made you realize a certain variable in an analytical model you use could be updated to reflect changes in market conditions, so you make a note to confer with the other analysts.
3:45 p.m.: Read the Daily Livestock Report on the CME Group website.
3:55 p.m.: Field a call from a customer that supplies feed to feedlots. Answer questions about implications of grain prices on cattle feeding profitability.
4:15 p.m.: A cow/calf operator in Nebraska is working on analyzing the finances of his ranch. Show him the online cow-calf breakeven calculator and answer any questions.
4:30 p.m.: Complete an article you began writing last week about supply and demand in the fed cattle market. Double-check source numbers and confer with other analysts where needed.
5:30 p.m.: Head home.
7:30 p.m.: Check emails again before calling it a day.
10:15 p.m.: Reflect on the important work done today in helping beef producers make sound financial decisions based on the well-researched presentation of data.
THE NUMBERS PERSON
Being an agricultural economist requires an analytical mind, an unquenchable desire to understand how markets function, and a love for food production. Good lists having an agricultural background as one of the key attributes CattleFax looks for when hiring analysts.
Good also says that having an advanced degree in agricultural economics is a great thing to have, especially these days. In fact, many agricultural economist positions require either a master’s or a PhD. The extra time in school can translate to higher earning potential. The U.S. Bureau of Labor Statistics estimates the median salary for economists was $99,180 per year in 2015.
Job opportunities are not limited to working for private companies. Government agencies, non-profits, universities, think tanks, and media companies all employ economists. If you have always been the person in your group of friends referred to as the “numbers person”, then a career as an agricultural economist might be the rational choice.
We want to hear from you. If you are interested in careers in agriculture, upload your resume. As always, if you have questions about this or any other career profile we have done, email Logan West at email@example.com
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