Producer Risk Management Organic Systems Planning Internship Practicum: Perdue AgriBusiness Inc. Colin Autrey Colinautrey@gmail.com Science, Discovery & the Universe Finance & Information Systems About Perdue Impact Over the winter, I completed a month long internship at Perdue AgriBusiness Inc. headquartered in Salisbury, MD. Perdue is a $6 Billion company and is one of the largest producers and sellers of grain and chicken on the east coast. Perdue’s mission is “to provide innovative food and agricultural products that enhance the quality of life for everyone we touch.” During my time here, I worked in four different departments including grain merchandising, transportation and logistics, accounting, and commodity trading. Each week, I was able to focus on a different aspect of the company and by doing this, I was able to learn the ins and outs of such a large corporation in a very short amount of time. Perdue Agribusiness can be contacted at the number (866) 816-7946 or by email at goagpartners@perdue.com This internship made me realize just how little I knew about how large corporations function. I found that agribusiness was much more interesting and complex than I first thought. Since Perdue was buying and selling such large quantities of grain and other quantities, an extremely important part of the business was knowing how to price the commodities they were buying and selling. It was important to know how to buy for the lowest price possible and sell for the highest price possible. This sounds a lot easier than it actually is and involves a much more complex process. The graphs and data to the left show price indexes based on the CBOT which is essentially a trading platform for agricultural commodities. The CBOT provides futures and options prices for the agricultural market. The data to the left shows examples of how Perdue uses economic and statistical data to create long-term financial plans and budgets Data & Graphs Seed Agronomic Services Organic Farm Inputs Producer Risk Management Organic Systems Planning Graph from Bloomberg showing 10 year economic trends of different commodities Perdue’s business models Perdue’s Selective Hedge Program Perdue’s business models Process and Daily Routine Conclusions and Future Plans Grain Merchandising Transportation This department of Perdue worked to buy and sell commodities such as corn soybeans and wheat. Working with the merchandisers, I had to help determine the prices of the commodities using the Chicago Board of Trade. As a merchandiser, you must have a strong understanding of daily markets and futures prices, but you also must be good at developing strong relationships with your customers because the farmers are ultimately the ones who produce the grain and product. As such a large company that transports hundreds of thousands of pounds of grain each day, transportation and logistics is an essential part of the business. Perdue’s facilities can only store so much grain and product, so it is important that they have a constant inflow and outflow of inventory. Logistics coordinators must be in constant contact throughout the day with the carriers (i.e. truck and rail companies) and making sure they get to the right place at the right time. Meet with multiple different people throughout the day learning their jobs Analyze daily reports about top agricultural highlights including information such as political events, weather reports, and currency valuations Worked with and learned about the selective hedge program which is used to help farmers better understand their financial status Analyze macroeconomic tends and determine potential future profits using Bloomberg systems Read and analyze research information on commodities, technology, demographics, and central bank policies Listen in on conference calls and meetings Assist in the broker reconciliation process for the accounting department Took tour around entire facility This internship was a learning experience to say the least. I can say with absolute certainty that I learned more in the month I spent at Perdue than a whole semester of school. Working at Perdue sparked a great interest in finance for me and I have decided to make it one of my majors because my experience during this practicum. Perdue was an excellent company to work for and I currently have another internship there for the entire summer. I plan on using my experiences from this internship to expand my career in finance and hope to get my MBA from the University of Maryland. Although I learned an abundant amount of information from this internship, I know there is still a lot more for me to experience from Perdue. During my internship this summer, I will be working more closely with the grain merchandising group and the AgServices department Commodity Trading Accounting & Finance During my time with commodity trading, I worked with two of Perdue’s analysts who were working on a long term financial plan for the company. In order to create this plan, it was necessary that they had extensive knowledge of financial markets and were able to effectively use hedging and pricing strategies. They used the computer software system, Bloomberg which provides real time financial data. The goal of this plan is to reduce risk and maximize profits. The accounting department brought everything from the business together and recorded it on paper or electronically. Every single business transaction is recorded in a systematic fashion. It is important to know exactly how well the business is doing and which areas of the business are doing well and which areas need improvement. This department accounts for all of the cash inflows and outflows and makes sure that Perdue collects all of the money from its customers. Acknowledgments to mentors, Bob Boyd, Sharita Spruill and Bryan Willey