Farmers with Agribusiness MBAs
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The business of farming isn鈥檛 as simple as it used to be. That鈥檚 why many young farmers are earning master鈥檚 degrees in agribusiness.
A couple of years ago, Michael Rattray found himself in the hot seat鈥攁 barstool in Des Moines, Iowa. On a break from touring Iowa farms, he was having a beer next to an inquisitive stranger, who asked him what he did. Rattray told the man he was completing a degree from Kansas State University while working a 750-acre family farm in Washington State. His story earned a double-take from the stranger: 鈥淲hy would you need a master鈥檚 degree if you鈥檙e just a farmer?鈥
It鈥檚 a question Rattray gets asked a lot. Most people assume that farmers are more likely to plow through dirt than spreadsheets.
And yet the 26-year-old Rattray makes it clear that there are more reasons than ever for the formerly tractor-bound to pursue a specialized business education in farm management. 鈥淚鈥檝e been farming my whole life, starting when my dad gave me 50 acres to manage when I was in high school. But I鈥檝e heard the horror stories about what happens to family farms. There are so many difficult questions to answer, like 鈥榃hich equipment should I buy first?鈥 鈥楬ow will I manage cash flow?鈥欌
Like many young farmers, Rattray sees himself as a business manager in an industry that鈥檚 changing fast, one that requires exactly the kind of business degree he received in 2017. 鈥淢y dad is 66 years old,鈥 he continues, 鈥渁nd he never hesitates to tell me when I鈥檓 screwing up. I鈥檝e got to have good answers.鈥
School鈥檚 in session
Rattray started finding the answers when he enrolled in the Kansas State program. It鈥檚 one of two dozen such programs around the U.S., mostly at land-grant universities like Colorado State and Florida A&M. They combine bedrock business administration courses like finance, marketing, and analytics with more down-in-the-dirt coursework on agricultural policy, resource allocation, and the global food market.
Kansas State鈥檚 master鈥檚 program was founded by Allen Featherstone in 1998. At the time, he was teaching agricultural finance and production economics, focusing on the business pressures and global opportunities in agriculture. Featherstone understood that standard MBA programs wouldn鈥檛 cut it for people who wished to find agriculture jobs in today鈥檚 conditions. 鈥淲e鈥檙e not teaching how to produce widgets,鈥 he says. 鈥淔armers need to understand biological seasonality, and that鈥檚 not important in other industries. And they need to be able to take a more quantitative approach to agribusiness.鈥
The program rolls out over the course of three years, and it adjusts a standard business education to fit the specific challenges of today鈥檚 agriculture. Degree candidates take courses such as Decision Tools for Agribusiness, which helps them analyze capital investments in land and machinery, and Agribusiness Risk Management, which helps them deal with chaotic factors like climate change and geopolitical trade as they develop crop mixes for local and international trade. And they can elect such internationally focused courses as Comparative Food and Agriculture Systems, which is team taught with faculty from partner universities in Russia, Uruguay, France, Thailand, India, New Zealand, and Uganda.
Especially interesting to Rattray was the international aspect of his master鈥檚 degree at Kansas State, where about 15 percent of the students come from outside the U.S. 鈥淚t gave me a perspective on how agriculture varies not only in climate and soil, but in politics and infrastructure as well,鈥 he says. He signed up for a Kansas State field trip to Brazil, where he saw how poor infrastructure and government corruption were harming output there. 鈥淚t gave me confidence in the business I am running,鈥 he says. 鈥淒eveloping countries with the highest population growth will not be able to keep pace with their own agriculture, so they鈥檒l buy on the world market. U.S. agriculture has proven to be efficient, growing, and adaptive, and that makes us competitive.鈥
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鈥淯.S. agriculture has proven to be efficient, growing and adaptive, and that makes us competitive.鈥鈥擬ichael Rattray, farmer
The online advantage
When Kansas State launched its master鈥檚 program, the admissions office had to face another issue: prospective students were busy running farms across the country and around the world. These students had educational needs, but they also had seeds to plant and harvests to bring in, on seasonal schedules rather than an academic calendar. Hence Kansas State鈥檚 early embrace of online learning, which was just developing in 1998. 鈥淚t was touch and go in the early days,鈥 Featherstone admits. But just as technology was transforming farming, it was also remaking remote learning, which was perfect for students who had farms to run at the same time they were pursuing their degrees.
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Just as technology was transforming farming, it was also remaking remote learning, which was perfect for students who had farms to run.
鈥淚鈥檓 at my best cognitively from about 8 am to 11 am,鈥 says Rattray, 鈥渟o that鈥檚 when I鈥檇 hop online and do my schoolwork.鈥 Kansas State鈥檚 program begins in January, when many fields are lying fallow. It requires its two-year-degree candidates to show up on campus at the beginning of each semester for a week, to meet their classmates, and partway through, when they mingle with food-business CEOs.
The case-study approach typical of MBA programs takes on a real-world, agricultural inflection at Kansas State. The university requires students to complete a thesis, which is usually pulled straight from challenges on their farms. 鈥淚 wrote my thesis about issues with corn storage in northern Mississippi,鈥 says Andy Milstead, age 40, who got his degree in 2017. He works on his family鈥檚 farm in Mississippi, and the lessons he learned related directly to his home crop. 鈥淓verybody in our program had full-time farming jobs, and a lot of them had families too,鈥 he says. 鈥淪o we were able to complete the program when we could. And everything in the classroom related to our own operations, and our real-life experiences.鈥
Learning experiences
It鈥檚 easy to understand the motivations of students who want to plow their educations back into their home turf. But not everybody has a farm to go home to. The opportunities are great even if you鈥檙e not Dad鈥檚 or Mom鈥檚 understudy. A recent study published by notes that there are substantial salaries to be earned in agricultural jobs. (See 鈥淥pportunity Knocks.鈥)
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Rattray declines to say exactly how much he鈥檚 making down on the farm, where he grows a variety of crops, including cherries, peaches, and Gala, Ginger Gold, and Honeycrisp apples. But he does note that the farm earns a return on assets of 14 percent to 17 percent, against stiff competition. And he continues to explore new fields of growth. 鈥淚 took a corporate finance class that helps me run investment analytics for everything I do on the farm,鈥 he says. It was a subject that was critical to his decision to expand the family business into commercial grass seed.
鈥淵ou can鈥檛 learn everything from your dad,鈥 says Rattray. 鈥淢ine was a first-generation farmer who quit school after the seventh grade, and he built the farm we have today. But I have to improve the business, and I needed an edge to do that.鈥
He believes that he found that edge at Kansas State, learning to discern where it would be better to add an employee or invest in new equipment. He also cites his coursework in pest management, trucking, and supply chain issues. His dad still manages to tell him what he鈥檚 doing wrong 鈥渏ust about every day.鈥 But that鈥檚 part of his continuing education as well, at Kansas State and in his own family fields: 鈥淚t鈥檚 as much learning what to do as what not to do.鈥
Milstead, too, is sorting through generational issues. Innovation isn鈥檛 easy, especially when the old ways are presumed to be the best ways. 鈥淚 see that mentality about a lot of things in the farming business,鈥 he says. 鈥淚鈥檓 guilty of it myself.鈥 Which is why the best aspect of his degree program was exposure to other students. 鈥淚t鈥檚 not just taking notes on a lecture,鈥 he says. 鈥淲e have big group discussions in class, with people from all over the U.S. and foreign countries. It鈥檚 the real world. I鈥檓 learning new ways to approach things, and different management styles.鈥
Among the pitfalls: Spending too much for equipment he didn鈥檛 need or, just as bad, spending more because he had avoided buying new gear. Which is precisely why Kansas State offers such courses as Optimization Techniques for Agribusiness. The guy at the combine dealership may have a slick sales presentation, but graduates of Kansas State鈥檚 master鈥檚 program can analyze the cost-benefit of a new machine. By applying those lessons to his 1,700 acres in corn and soybeans, plus 1,000 head of cattle, Milstead feels he鈥檚 able to do more in less time, and his costs per acre are down.
Given the costs, risks, and potential of modern farms, an MBA in agriculture is becoming an essential tool, next to combines and irrigation pumps. 鈥淚 needed that degree,鈥 says Rattray. 鈥淭he school of hard knocks is much more expensive.鈥