Randy Fortenbery helps farmers navigate volatility, uncertainty

By MATTHEW WEAVER

Capital Press

PULLMAN, Wash. — Farmers usually have one main question for economist Randy Fortenbery.

“They always want to know when the price is going to be better, and there’s not always a good answer for that,” Fortenbery said.

Because Washington state agriculture relies so heavily on exports, farmers often ask him about international political stability.

“They’re pretty well-informed about what’s going on, so oftentimes it’s less about giving them brand new information, but more about my interpretation of what events might mean,” said Fortenbery, who is the Thomas B. Mick Endowed Chair in Small Grains Economics at Washington State University.

His predictions can change in a hurry.

“Especially a surprise or any kind of political upheaval, it changes market dynamics significantly,” he said.

That’s just the nature of markets, Fortenbery said.

“Information is changing all the time, and if you allow markets to function, they’re going to reflect the most recent information,” he said. “I’m just trying to keep abreast of what’s happening globally, and then bring back what that might mean for us in Washington agriculture.”

Fortenbery delivers an annual economic outlook at the Spokane Ag Show, and speaks at industry conventions, meetings and field days.

“He’s an economist that’s fun to listen to — he can put it in terms that growers can understand,” said Ben Barstow, a wheat and barley farmer near Palouse, Wash., and chairman of the Washington Grain Commission. “He is top-notch in his field. USDA and people in industry contact him frequently and ask him about economics and policy stuff. We are really fortunate to have him here. He’s probably one of the top three ag economists in the country.”

Small grains economicsThomas Randall “Randy” Fortenbery, 65, was hired in 2011 to be WSU’s first endowed chair in small grains economics.

The grain commission established the endowment in 2009, renaming it in 2012 to honor former CEO Tom Mick upon his retirement.

Research endowments are perpetual, and managed by WSU with distributions made annually to the faculty member holding the endowment.

The commission’s original principal for the economic endowment was $2 million. The current value is nearly $2.8 million, according to the commission.

“Any time anything comes up about wheat economics, pricing or trade, Randy is always on top of it, and if he’s not, he’ll figure out something and come up with an answer for you,” Barstow said. “There’s been multiple times we’ve had some questions come up and Randy comes back a year later with a fully researched answer for it. He’s just an amazing asset.”

When he started at WSU, the job definition was wide open.

“I kind of had to figure out what the industry needed from me, because they put a lot of money into this position,” Fortenbery said. “It was important to figure out how that money could best be used and how the producers would benefit from the position.”

The funds are invested by the WSU Foundation and Fortenbery receives earnings off the investments to support his research and outreach activities.

“When he gives presentations, the rooms are usually packed,” said Randy Suess, retired wheat farmer and a grain commission board member when Fortenbery was hired at the university. “So many people come to hear what he has to say, because he’s pretty well been spot-on when it comes to predicting what the future’s going to be.”

“Selling a crop once it’s been harvested is nearly as important as growing it,” said Michelle Hennings, executive director of the Washington Association of Wheat Growers. “Randy is very skilled at taking the many factors that could impact the price of wheat and presenting that information in a way that is easier to understand and lets producers use it to inform their marketing decisions.”

Becoming an economistFortenbery grew up in Anchorage, Alaska; South Dakota and Lewistown, Mont. “I moved around a bit, my dad was a bush pilot and a wildlife biologist.”

His grandparents were farmers. He lived in ag areas growing up, and spent time working for farmers or at grain elevators when he was younger.

He and Eve, his wife of 40 years, have two children, Josh, an attorney in Juneau, Alaska, and Shannon, until recently a buyer for an outdoor retailer and now membership and giving manager at the Museum of Idaho; and one granddaughter, Poppy, 4 months.

He originally studied zoology and wildlife management. He was interested in working with large mammals in wilderness areas.

“I enjoy spending a lot of time in the back country, so it was about finding some sort of a career that would allow me to do that,” he said.

He’s an avid outdoorsman; hobbies include hunting, fly fishing, golf, horses, hiking, backpacking, skiing and biking. “Almost any sort of outdoor activity.”

He considered becoming an attorney, practicing natural resource and environmental law.

He was a year ahead of Eve at Montana State University. While waiting for her to graduate, he was offered the opportunity to get a master’s degree in economics. He’d already taken a lot of economics courses as electives.

That prompted a shift in careers.

“I got really interested in futures and options markets, and how those are used to provide information to all kinds of decision-makers,” he said.

Fortenbery was a futures trader for 30 years. He was the director of research at Frontier Risk Management in Chicago, and managed the direct trading of part of the firm’s portfolio.

“As a company we had what was at the time the largest speculative futures trading fund focused on agriculture, and had some of the country’s largest agribusiness firms as clients who we managed hedging for,” he said.

He doesn’t do much ag futures trading these days.

“That’s a very time-intensive activity, and it’s kind of high risk,” he said. “You don’t want to be in a position where you’re getting later in your career, you take a hit and you have to try to get it back.”

Making an IMPACTFortenbery is also director of WSU’s IMPACT Center.

When commodity commissions, private companies or state agencies have a specific agriculture-related question, they go to him.

Fortenbery and up to nine fellow researchers find the answers.

“It’s fun because we’re really focused on a question that is important to somebody that’s going to make a real decision,” Fortenbery said. “These people are interested in doing something, they just need some research underpinning their decision-making process.”

An annual status report on Washington agribusiness has proven to be a useful tool industry-wide. The 2024 report will be released in January.

The center also received a $400,000 grant from the state legislature to consider the overall competitiveness of Washington agriculture, and the effects of regulatory changes.

That study will be finalized in July 2025, Fortenbery said.

“At a time when we are looking to increase the viability and competitiveness of Washington’s agricultural products, it’s vital that we have a team that understands not only the importance of Washington’s agriculture industry but also the role it plays in our state’s economy,” said Derek Sandison, director of the state Department of Agriculture. “Randy Fortenbery’s research and expertise surrounding agricultural economics continues to benefit Washington agriculture at every level.”

Making informed decisionsFortenbery enjoys visiting with farmers, and learning what they see as their primary challenges.

“Some of it are things I can’t help them with, like dealing with individual pests,” he said. “But some of it, maybe I can.”

He recommends farmers be realistic about their opportunities, and not panic when they experience “a significant risk event.”

“A lot of times, we’ll get a nice run in the market, and people just are convinced that it has to continue to go, and they’re very reluctant to make a marketing decision because they don’t want to lose another nickel or another dime, but they may be risking a dollar not to do that,” he said.

Fortenbery hopes to help growers make an informed decision.

“Just trying to step back and take an objective view of what is reasonable and good for your operation is probably the most important thing,” he said.

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Title: Thomas B. Mick Endowed Chair in Small Grains Economics, Washington State University; director, WSU IMPACT Center

Age: 65

Hometown: Grew up in Anchorage, Alaska; South Dakota and Lewistown, Mont. “I moved around a bit, my dad was a bush pilot and a wildlife biologist.”

Current location: Viola, Idaho

Education: Bachelor’s degree in natural resource economics, master’s degree in applied economics in Montana State University; Ph.D. in agricultural economics and agricultural finance, University of Illinois

Family: Wife Eve of 40 years; son Josh, with partner Hannah; daughter Shannon, with husband Sam; granddaughter Poppy, 4 months

Hobbies: Hunting, fly fishing, golf, keeps horses, hiking, backpacking, skiing, biking. “Almost any sort of outdoor activity.”

Websites:

https://people.ses.wsu.edu/fortenbery/

https://ses.wsu.edu/impact-center/

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https://ses.wsu.edu/impact-center

{/child_related_content_content}{child_related_content_uuid}154fb355-a293-44a0-bc59-58576e133109{/child_related_content_uuid}{/child_related_content_item}{child_related_content_item}{child_related_content_style}Glance Box{/child_related_content_style}{child_related_content_title}Marketing Pointers from Randy Fortenbery{/child_related_content_title}{child_related_content_content}

• Try to develop pricing objectives at planting time for the new crop. These should be based on current market conditions and the outlook for the coming months. You may have multiple prices for different portions of the crop.

• It is good to develop some price objectives early even if you do not want to start forward pricing your crop until March or April because of yield worries.

• If you are storing a crop already harvested, try to think less in terms of future price direction, and more about whether the market is offering you a profit over your storage costs. If you can lock in a minimum of 5 cents per bushel per month for storage that may turn out better than just hoping prices go up in the future.

• Be careful about storing a crop if the local price is already quite high, by historical standards, to the current futures price. Even if futures prices go up, cash prices may not.

• In times of high price volatility, try to step back from the day-to-day price fluctuations and pick sale prices with a longer-term view of market activity.

• Pay attention to the general market outlook but be careful about speculating with too much of your crop on higher prices if current prices already provide an opportunity to cover costs and earn a margin.

• Don’t listen to your neighbor — he or she probably didn’t sell for $1 a bushel more than you!

• Marketing plans need to be flexible as conditions change, but those that take the time early to develop a marketing plan often do better than those with a wait-and- see approach.

{/child_related_content_content}{child_related_content_uuid}6de5acc3-c0c9-4e59-a640-9ec0ae6e4b63{/child_related_content_uuid}{/child_related_content_item}{/child_related_content}

Title: Thomas B. Mick Endowed Chair in Small Grains Economics, Washington State University; director, WSU IMPACT Center

Age: 65

Hometown: Grew up in Anchorage, Alaska; South Dakota and Lewistown, Mont. “I moved around a bit, my dad was a bush pilot and a wildlife biologist.”

Current location: Viola, Idaho

Education: Bachelor’s degree in natural resource economics, master’s degree in applied economics in Montana State University; Ph.D. in agricultural economics and agricultural finance, University of Illinois

Family: Wife Eve of 40 years; son Josh, with partner Hannah; daughter Shannon, with husband Sam; granddaughter Poppy, 4 months

Hobbies: Hunting, fly fishing, golf, keeps horses, hiking, backpacking, skiing, biking. “Almost any sort of outdoor activity.”

Websites:

https://people.ses.wsu.edu/fortenbery/

https://ses.wsu.edu/impact-center/

https://ses.wsu.edu/impact-center

• Try to develop pricing objectives at planting time for the new crop. These should be based on current market conditions and the outlook for the coming months. You may have multiple prices for different portions of the crop.

• It is good to develop some price objectives early even if you do not want to start forward pricing your crop until March or April because of yield worries.

• If you are storing a crop already harvested, try to think less in terms of future price direction, and more about whether the market is offering you a profit over your storage costs. If you can lock in a minimum of 5 cents per bushel per month for storage that may turn out better than just hoping prices go up in the future.

• Be careful about storing a crop if the local price is already quite high, by historical standards, to the current futures price. Even if futures prices go up, cash prices may not.

• In times of high price volatility, try to step back from the day-to-day price fluctuations and pick sale prices with a longer-term view of market activity.

• Pay attention to the general market outlook but be careful about speculating with too much of your crop on higher prices if current prices already provide an opportunity to cover costs and earn a margin.

• Don’t listen to your neighbor — he or she probably didn’t sell for $1 a bushel more than you!

• Marketing plans need to be flexible as conditions change, but those that take the time early to develop a marketing plan often do better than those with a wait-and- see approach.