MANHATTAN, Kan. — The Center for Risk Management Education and Research at Kansas State University has set the dates for a conference that organizers say will arm food companies and others in the industry to better manage the challenges of producing their products.
The conference, ‘Managing Commodity Market and Financial Risk,’ is set for Tuesday through Thursday, April 14-16 at the Hilton Garden Inn in Manhattan. It is geared toward any business facing commodity risk, especially those in food and beverage, food processing and manufacturing, consumer packaged goods, and pet food companies.
Registration and more information is available online, or through the website for the Center for Risk Management Education and Research.
“A lot of times in the food industry, we are focused on outputs, or the products that we are selling,” said Brian Coffey, an assistant professor of agricultural economics and the director of executive programs for the center. “But there is substantial risk involved with the inputs, or the products that go into making foods.”
Coffey cited an example of a company that makes pet food. The company must leverage the price of their product based on the price of grain, meat by-products, paper used for packaging and other considerations.
“All of those things are going to affect their bottom line,” Coffey said. “They often set a price for their product one or two years in advance, so they have to plan that far ahead on the cost side, also. In the meantime, even though they’ve got a price locked in on their product, the prices of commodity inputs might be bouncing around all over the place.”
The April conference will further help risk managers make sense of the information and tools available to them, Coffey said. “Our goal is to help each company create a risk attitude culture so that they’re planning ahead, they’re disciplined and they’re doing what they can to mitigate those risks.”
The conference will pair participants with experts in many areas, including finance, futures markets, banking, compliance, and more. Numerous case studies will be presented to help participants understand the concepts in real-world situations. Coffey said each participant will leave the conference with an understanding of the essential elements for a risk management plan.
“We are providing a broad view of commodity price risk management, but each participant will receive the foundation of a sound risk management plan so that they can go back and customize a plan for their organization,” he said.
The conference agenda is built based on feedback K-State agricultural economists have received from the food industry.
“Anecdotally, we found that people say, ‘yeah, we can really use this,’” Coffey said. “There’s a strong interest among people to build their risk management knowledge. For some, it will be a refresher course, but for others it will be completely new.”
In addition to K-State faculty, the conference presenters include representatives from Smithfield Foods, the U.S. Commodity Futures Trading Commission, the CME Group and others.
“We think we’ve put together something that is unique,” Coffey said. “There just isn’t another opportunity to get those people in the same room, with so many years of relevant experience, and be able to interact with them.”