Risk Lab Project Teams Up Students with Land O’Lakes

Working with Land O’Lakes for our Risk Lab project this fall was a tremendous experience for our group. Our team consisted of Tarcisio Diniz de Almeida, Rafique Jiwani, Kevin Kellert and Sahand Sepehrnia. It was a true privilege for me to interact with Tarcisio, Rafique and Sahand, as our varying backgrounds provided multiple perspectives which helped inform our analysis.

Dairy farming has numerous risks that impact the livelihoods of farmers and consumers. Our team analyzed these risks, and created a tool for Land O’Lakes to strategize how farmers can protect themselves from changing market conditions.

Our group was brand new to the dairy industry, so we read industry and academic publications to get up to speed, and met weekly with Dr. Nelson Neale from Land O’Lakes and Professor Russell Walker. We used statistical analysis to prioritize which risks are most impactful to a farmer’s bottom line. We ultimately developed a risk management tool that used years of pricing and volatility data for milk and feed inputs to simulate farmers’ future profitability. In addition, Congress is considering new dairy legislation in the Farm Bill, and regulatory policy was incorporated into the recommendations.

Our learning was further enhanced by personal interactions with Land O’Lakes professionals and dairy farmers. Land O’Lakes Board Chairman Pete Kappelman was gracious enough to host us at his Wisconsin dairy farm. Seeing the operations firsthand and learning from Pete’s experiences reinforced how critical risk management is. We were amazed by not only the storage space required for feed products including corn, soymeal and cottonseed but also by how quickly they needed to be replenished. The operation is truly 24/7 year-round, as the cows can withstand even the harshest of winter conditions. Dairy farming is certainly tough work, and providing farmers with tools to help protect their third, fourth, or even fifth generation family farm and its employees is both gratifying and humbling.

Presenting our findings to Land O’Lakes executives and dairy producers from California, Pennsylvania and Wisconsin was a phenomenal opportunity. Developing an actionable tool to benefit such a supportive firm is a major highlight of our Kellogg experience.

Read more:

Field Work: Students create risk management tool for Land O’ Lakes

Kevin Kellert ’14 is originally from Toms River, NJ. He previously worked in financial services in New York. He is an avid golfer and maintains a personal finance and economics website catered to young professionals.