Ag business major Alan Peachey (pictured left) was recently recognized by Helena Chemical Company as the 2011 Outstanding Midwest Division Intern Award winner. Peachy is a senior at Iowa State University. He was selected from a competitive group of fifty interns throughout the Midwest for his outstanding performance throughout his summer internship with Helena Chemical Company.

During his internship, Peachey worked with dealers positioning and evaluating multiple agricultural chemicals and proprietary yield enhancing products throughout the Iowa market.

The 2011 Helena Summer Intern class was comprised of 50 students from Colorado State University, Iowa State University, Kansas State University, Michigan State University, Purdue University, University of Illinois-Champaign-Urbana, University of Missouri- Columbia, University of Nebraska- Lincoln, University of Wisconsin- Madison, University of Kentucky, Michigan State, NW Ohio State, University of Wyoming and the University of Wisconsin-River Falls. The $1,500 award is designed to encourage creativity and innovation among the intern team and assist with college expenses.

Helena Chemical Company is a leading distributor and formulator of crop protection and crop production inputs and services. Based in Collierville, Tennessee, Helena has over 350 locations across the United States.

"Futures Market Failure?" With Aaron Smith, University of California, Davis. Monday, September 19, 4:10 PM to 5:30 PM, 368A Heady Hall.

Aaron Smith is an Associate Professor of Agricultural and Resource Economics at the University of California, Davis, where he has been since 2001. Originally from New Zealand, he earned his PhD in Economics from the University of California, San Diego. His research addresses trading in commodity and financial derivatives markets. Recent project topics include identifying informed traders in commodity futures markets, understanding commodity booms and busts, modeling demand and supply for agricultural commodities, and explaining recent failures of grain futures markets to accurately price the underlying commodity.

Abstract: In a well-functioning futures market, the futures price equals the price of the underlying asset on the expiration date. An unprecedented episode of non-convergence in corn, soybeans, and wheat markets began in late 2005, and with the exception of brief periods, largely persisted until 2010. During this episode, futures contracts expired at prices up to 35 percent greater than the prevailing cash grain price. Using a rational expectations commodity model, we demonstrate how such non-convergence can be produced in equilibrium by the institutional structure of the delivery market. Specifically, we show how a wedge between the price of storing the physical commodity and the cost of carrying the delivery instrument causes non-convergence. This wedge can be conceptualized as the coupon in a present value equation, so our results provide an example of a significant and complex market in which a present value model explains prices.

"The Effect of Biofuel Policies on Food Grain Prices," with Harry de Gorter, Cornell University. Friday, September 23, 3:40 PM to 5 PM, 368A Heady Hall.

Harry de Gorter is a professor in the Charles H. Dyson School of Applied Economics and Management at Cornell University. His specialty is agricultural trade policy with much of his recent work in the areas of biofuels and agricultural policy reform and the Doha Development Agenda. He is also currently working on renewable electricity policy, carbon offsets, and cap and trade. Recent papers have focused on the economics of biofuel policies and the implications for carbon mitigation, WTO disciplines on agriculture, alternative agricultural import barriers, domestic subsidy programs and export subsidies, and the impact of trade liberalization.

This lecture will outline the mechanics of the various ways biofuels and farm policies can impact the level and volatility of food grain commodity prices. Emphasis will be given on the interaction effects between biofuel/farm policies within a country and between countries. de Gorter will also discuss how biofuel policy changes the traditional analysis of price volatility in grain markets with the supply of storage model, and will analyze the conjecture that grain prices may be less volatile than if no ethanol existed. The lecture will consider whether US corn-ethanol production is possible without supporting policies, what impacts biofuel policy has on food grain prices, and to what extent biofuel policy contributes to inefficient agricultural policies.