By Chad Fiechter, Cornell Graduate Student
The current depressed dairy market has broad rural economic impacts. Input suppliers are among those who have been squeezed by multi-year low milk prices. Cornell University Assistant Professor of Agribusiness and Farm Management Jennifer Ifft, and graduate student, Chad Fiechter, are working to identify some of the impacts on the feed manufacturing industry.
Feed manufacturers in the Northeast have shared many stories of financial and personal stress from extending credit to their dairy customers. Some stories have positive endings—family farms who are able to weather the current farm economy due to partnership with suppliers. Others have negative endings—feed manufacturers saddled with thousands of dollars of unsecured debt after farm bankruptcies. The Cornell team has worked with several Northeast Agribusiness and Feed Alliance (NEAFA) members to develop a simple survey to analyze some of the impacts of extending credit to farms.
The Proposal: Gather 10 years of basic, limited, historical information from feed manufacturers. This information will include 4 key financial categories and the typical credit terms offered to customers. Confidentiality is extremely important and multiple provisions have been developed to protect the survey information.
All data will be presented as a whole industry average, no individual data will be shared or disseminated privately or publicly
A Data Use Agreement (DUA) developed by the Cornell University Office of Sponsored Programs provides additional legal protection
Contains the language of a Non-Disclosure Agreement
Limits researchers with availability to the data
An oversight board formed by the Northeast Agribusiness and Feed Alliance (NEAFA)
A voluntary board whom will review any reports generated from this project
The participation clause for data use within the data use agreement
Must obtain 75% of the total industry tons
Must obtain at least 10 participating feed manufacturers
If both items are not met, the data cannot be used for research
The objectives of the project are as follows:
Set a benchmark for industry-standard trade credit practices: is your firm above or below the industry average?
A better understanding of economic conditions within the Northeastern agricultural economy
Valuable information for public policy discussions
Industry specific information for discussions with agricultural lenders
This project has been graciously supported by a voluntary NEAFA oversight board. With their help, the survey has been simplified and shortened. Expect a call from Chad Fiechter to ask for your participation.
Chad Fiechter - (219)-208-2016 – cmf268@cornell.edu