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Endowed Chair of Grain Marketing and Risk Management Filled by Dr. Xiaoli Etienne

In 2018, the Idaho Wheat Commission (IWC) signed an agreement with the University of Idaho (UI) to fund the Endowed Chair of Grain Marketing and Risk Management.  Part of the Barker Trading Program, the Chair is shared between the College of Agriculture and Life Sciences and the College of Business and Economics.  The $2 million investment, made with the checkoff dollars of Idaho’s wheat farmers, will give students real-life experience in trading, hedging, and investing in commodity markets.  This specific set of knowledge, understanding, and skills will increase profit and decrease loss in agricultural operations across Idaho as those students return to the farm.  In addition, the findings from this position will be shared with Idaho wheat growers through publications, seminars, and county extension. 

“We feel strongly about the importance of marketing and risk management for our agricultural businesses. This endowment is a bridge between agriculture and business that hasn’t existed before, and fills the gap in the supply chain,” said Clark Hamilton, IWC Vice Chair.  

This year, Dr. Xiaoli Etienne was recruited and hired by the University to fill the endowed chair position.  “Xiaoli was selected to fill the first Idaho Wheat Commission endowed chair after an extensive nationwide search,” explained Bill Flory, IWC commissioner.  “Her previous experience and commodity research are highly regarded by students, growers, and industry.”  Dr. Etienne will begin teaching in January.  IWC is pleased to take this opportunity to introduce Idaho’s grain growers to Dr. Xiaoli Etienne.

Tell us about yourself.  Where did you grow up, where did you go to college, and what did you study?

I grew up in the southeastern part of China, about four and half hours south of Shanghai by car. With a population of about half a million, Lishui, my hometown, is considered a small city by Chinese standards. My parents both worked for the agricultural division of my hometown’s local government office. As part of his job, my dad visited rural farms to conduct field surveys, and would occasionally let me tag along. These trips with my dad taught me that these poor farmers are often taking life-or-death financial risks on an annual basis. Coming to grips with this fact led me to study rural and Regional Development at Renmin (People’s) University of China in Beijing, where I earned a bachelor’s degree in 2007.

What did you do after your graduation in 2007 and before you accepted the IWC Endowed Chair position?

I went to the University of Illinois at Urbana-Champaign for graduate school in 2007. After graduating with a Ph.D. in Agricultural and Applied Economics in 2013, I moved to Washington, D.C. and worked as a short-term consultant at the World Bank group, where I had the opportunity to work with many internationally renowned experts on agricultural economics. A year later, I moved to West Virginia University (WVU) and joined the Division of Resource Economics and Management as an assistant professor. I was later promoted to associate professor with tenure.

What led you to apply for the IWC Endowed Chair position and the prospect of moving across the country?

I first saw the IWC Endowed Chair position flyer in 2019 but was hesitant to apply for the position. After all, moving the whole family across the country to an unfamiliar area would be a daunting task. The pandemic really changed my mindset. Pre-pandemic, I lived a busy, non-stop life, constantly yearning for more free time. Working from home during the pandemic allowed me to pause and take a step back to reflect on my career. I started asking myself what I really wanted to achieve in my professional life and how I could make my work more meaningful. Although I was perfectly happy at WVU, I realized that it’s perhaps time to take on new challenges and see how my work might make a larger impact and contribute more to society at large. So, I decided to give it a try and applied for the IWC endowed chair position.

You are the first person to hold this position at UI.  Do you have any goals for the future?  What are you most excited about in this new position?  

I am very excited and feel humbled to have been selected for this position out of many talented candidates. Although I have been working on commodity price analysis for more than a decade, I consider myself still relatively new to the profession, especially in the context of agriculture in the Pacific Northwest. In the short term, I hope to learn more about the agricultural sector in the area, as well as the emerging issues faced by farmers and the wheat industry. In the longer-term, I hope to establish a research portfolio that addresses these emerging problems, to benefit farmers and agribusinesses in Idaho. Further, I would like to integrate my research with teaching and extension activities, so that I can help train the next generation of farmers with well-rounded risk management skills, which will enable them to adapt and thrive in today’s ever-changing world. Ultimately, I hope my work can help make the agricultural sector in Idaho more competitive in both domestic and international markets and become more resilient to external shocks.

What do you bring to the program at UI?

I believe the Agricultural Economics and Rural Sociology program at UI, as well as UI Extension, can benefit from my multicultural experience in agriculture. Coming to the U.S. as an international scholar, I have the natural tendency to look at questions from more of a global perspective. This international lens has driven my past research—I often work on problems with broad implications for the agricultural sector. My experience, however, is not limited to agriculture. Over the past decade, I have conducted research on various other commodities, such as crude oil, natural gas, lumber, and iron ore, all of which are keenly linked to the agricultural sector. Knowledge of these fields would come in handy for future research and outreach work given the increasing complexity of the agricultural supply chain.

What is an accomplishment you’re proud of so far?

I am very proud of the work I have done with my students so far. In my six years at WVU, I had served as the major advisor for eight graduate students, all of whom landed amazing jobs either in academia or industry right out of graduate school. In fact, most of my recent work was coauthored with graduate students. As an educator in higher-education institutions, I always go the extra mile when working with students, all for the satisfaction I get when learning that I played a role in shaping students’ careers.

I am also proud of how quickly I was able to adapt to new environments and take on new challenges. The economy in West Virginia is dominated by the energy sector, with agriculture only taking on a small share. Although most of my pre-WVU work focuses on agricultural commodities, I swiftly shifted my research focus to the energy sector, and later expanded to multidisciplinary work, to make my work more relevant to the stakeholders in West Virginia.  In the beginning, I actually doubted if I could successfully make the transition, but years of hard work led me to receive multiple research awards at WVU. Words cannot express how proud I am of the great work I have done at my previous institution. I am confident that I can make a similar impact at the University of Idaho.

What is something you wish every farmer understood about risk management, and why is risk management important to daily operations on the farm?

Agriculture is one of the riskiest professions in the world. From weather, input/output prices, to government policies and consumer preferences, agricultural production is subject to risks from every facet of the supply chain. Uncertainties in any of these factors are likely to result in wide swings in farm income. For instance, the severe drought this past summer in the Pacific Northwest destroyed the wheat crops in the region. For farmers that did not have crop insurance, these losses could lead to negative cash flows, and sometimes even force them to exit the farming sector. Indeed, data shows that there is a significant link between crop failures and farm bankruptcies in the U.S.  Since 2013, the number of farms filing for Chapter 12 bankruptcy in the U.S. has been rising. Given increasing climate risks and changing domestic/trade policies, it is important for farmers to incorporate risk management strategies into daily operations.

Beyond understanding the importance of risk management, farmers are encouraged to take a holistic approach when it comes to risk management because of the large number of uncertainties involved in the farming sector. Farmers should carefully identify and classify the risks, measure and assess the potential outcomes under various scenarios, evaluate their risk-bearing capacity and risk tolerance levels, and design risk management strategies that fit their goals with the assistance from professionals. Additionally, it is important to understand that there is always a tradeoff between risk and return—activities/investment with a higher (lower) expected return often comes with a higher (lower) risk. A successful risk management strategy would maximize the expected return given the maximum risk level desired.

We welcome Dr. Xiaoli Etienne and her husband, along with their two children, to Idaho!

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