1. Enhancing On-Line Agribusiness Instruction through the use of Spreadsheet Based Feasibility Templates Phil Kenkel and Rodney Holcomb Oklahoma State University WERA‐72 Annual Meeting June 30th – July 1st, 2014 Santa Clara, California

2. On-Line Courses New opportunities in efficiency, flexibility and delivery Opportunity to expand the student pool In some studies on-line students out performed their peers in face-to-face classes Creates new challenges in communicating and interacting with students

3. Specialized Courses Create Additional Challenges Cooperative Class: challenge of explaining the complex financial model and the inter-related decisions involving profit distribution, cooperative cash flow and owners return Bio-energy- economic issues with various platforms, incentives and sustainability issues Capstone class- intensive investigation of a realistic agribusiness example

4. Individual and Group Projects in On- line Courses Integrates concepts and adds experiential learning One example is feasibility assessment – Market analysis – Input output relationships – Capital structure – Pro forma financial statements – Plant and equipment cost estimation – Project appraisal techniques

5. Challenges of Projects in On-line Courses Initiating the project early in the semester Guiding the students through complex skills sets Identifying problems/questions and responding Communicating missing components, data or structures

6. Spreadsheet Based Feasibility Templates Developed at Oklahoma State for extension purposes to facilitate and supplement feasibility studies Provide a complete set of pro-forma financial statements and return on investment analysis Greatly reduce time in project analysis and ensure that financial projections are internally consistent

7. Examples of Feasibility Templates Alfalfa dehydration Biodiesel production Cotton ginning Cellulosic ethanol Commercial bakery Flour mill Beef packing plant Multi-species meat processing plant Machinery cooperative Sweet sorghum ethanol Winery

8. Basic Format Input page: price, volume, utilities, maintenance, insurance, taxes, capital structure, personnel benefit costs, etc. Equipment and facility page Personnel page Intermediate calculation pages Income statement, cash flow, balance sheets Return on investment and owners return

9. Control and Integrity of Format Password protected formulas for financial calculations Some conversion factors or investment-output relationships are fixed to prevent “blue sky” scenarios User has a wide variety of inputs and can do extensive sensitivity analysis

10. Integrating Templates into On-Line Courses On-line undergraduate cooperative course On-line undergraduate capstone course On-line Masters Bioenergy Feasibility and Bioenergy Sustainability courses

11. Cooperative Course Template used in homework assignments covering financial statements, capital structure, profit distribution and taxation “Start Your Own Cooperative Project” Allows the student to understand inter-related decisions concerning cash patronage, qualified stock patronage, non-qualified stock patronage, unallocated reserves and equity revolvement Students see how profits are generated, retained, and distributed and how equity is created and returned. Understand the balancing act between the cooperative cash flow and the member’s return

12. Evolution of Cooperative Feasibility Template Generic template used in face-to-face class and instructor worked with teams to customize the template for their example Specialized templates developed for on-line class Cattle feed yard, Equine sports medicine, Grain elevator, Farm supply, Local food market, Multi- species slaughter, Student book store, Rural medical services, and Student housing

13. Success of Specialized Templates Structures built in to keep projects realistic – Cattle feed yard costs based on ration, feed conversion and death loss – Retail cooperatives building cost related to sales per square foot – Grain elevator and farm supply based on crop acreage in market area and market share Teams spent more time on cooperative structure and decisions

14. Bioenergy Templates used to provide overview of feasibility factors for various platforms and the impact of price relationships and incentives Biodiesel-illustrates input-out price relationship and scale economies Cellulosic ethanol illustrates feedstock logistics cost Sweet sorghum ethanol can illustrate co- generation economics

15. Project Modeling Concepts Lang factor (ratio of total project cost to cost of major equipment) Happel method: detailed estimates of equipment cost, installation materials and labor, overhead, engineering and contingency costs all built off of major components and type of processing

16. Enabling Group Projects Less intimidating- students have a starting point and can organize what they need to do Instructor can stay abreast of project by reviewing intermediate versions of the template Students can organize interactions and share “in- progress” versions among the team members All of the team can work off the final version in preparing the written report Efficient for the instructor to review and grade

17. Summary On-line courses can be flexible, efficient and expand the student pool Integrating group or individual projects into an on-line class is challenging Feasibility templates have proved a successful tool for conveying specific concepts and as a vehicle to facilitate group projects The templates are available free of charge from Oklahoma State University