June 24, 2005
Financial records up for bid at Top Farmer Crop Workshop
WEST LAFAYETTE, Ind. - Every man has his price. A Purdue University agricultural economist is counting on that ages-old maxim to calculate the worth farmers place on financial information.
During Purdue's 38th annual Top Farmer Crop Workshop, attendees can take part in what's called an experimental auction. Instead of purchasing merchandise from a fast-talking auctioneer, however, farmers will submit secret bids for a chance to sell their financial records to Purdue.
Economist Christine Wilson will lead the auction and its accompanying session, titled "What's Your Bid for Your Bookkeeping?" The auction is one of more than 50 Top Farmer Crop Workshop sessions, covering everything from agronomic practices to yield monitor technology. The workshop takes place July 17-20 in Stewart Center on the Purdue campus.
Like everyone else, farmers save financial documents for tax and planning purposes, Wilson said. And, like most people, they wonder whether all those pieces of paper are of any real significance.
"Most farmers keep a lot of records," Wilson said. "They keep both financial records and production records. But they have a hard time knowing for themselves how valuable the financial records are. So one thing we're trying to do at the workshop is come up with a sense of how valuable those records are to farmers, and get them to put a dollar amount on that value."
Following an explanation of how the auction works and a practice auction involving candy bars, participants will complete a financial records inventory and bid sheet. The bid sheet will ask what kinds of financial records farmers would be willing to part with, including balance sheets, statements of cash flow, income statements, statements of owner's equity, checkbook registers and tax records. Farmers then will write down a bid price or check a box indicating that they would not sell their records at any price.
Farmers can sell up to the last five years of their financial records.
"In the experimental auction, we'll ask participants to give us a bid on what is the least amount of money they would be willing to accept from us in exchange for their financial records," Wilson said.
Farmers who intentionally overbid will stand little chance of winning, and those who grossly underbid will regret not asking for more if they come out on top, Wilson said. "You want to bid exactly what your records are worth. That's your best strategy."
The overall winning bidder from Top Farmer and other experimental auctions Wilson is conducting around the state will receive an amount in cash equal to the second-lowest bid submitted. The winning bidder's records and data collected from auction participants will remain confidential. Data analyses could be used in future Extension programs and publications, Wilson said.
Researchers and food companies increasingly are turning to experimental auctions to gauge public opinion, Wilson said. Purdue's auction could be the first of its kind, she added.
"The experimental auction is a relatively new technique," she said. "It's been used quite a bit in the last few years for developing, marketing and pricing new products. But to the best of my knowledge, it hasn't been used to look at financial records or a lot of high-value nonfood types of items."
Top Farmer Crop Workshop is aimed at leading crop producers who use cutting-edge technology and production practices. Most who attend farm more than 2,000 acres.
About 60 speakers are on the workshop schedule this year, including agriculture industry professionals, farmers and specialists from Purdue and other universities. Andy Miller, director of the Indiana State Department of Agriculture, will address workshop attendees during a July 19 dinner.
For a complete list of Top Farmer sessions and speakers, log onto the workshop Web site.
Workshop registration is $250 per person and $75 for each additional person from the same farm. Registration fees include two meals, coffee breaks, a workshop proceedings notebook and the use of Purdue computers. Lodging and other meals are extra.
Enrollment is limited. Registration forms are available on the workshop Web site. For additional registration information, contact Tom Robertson of Purdue's Conference Division at (765) 494-7220, by fax at (765) 494-0567 or by e-mail at firstname.lastname@example.org.
For more information about workshop sessions and speakers, contact Jess Lowenberg-DeBoer, workshop coordinator, at (765) 494-4230 or by e-mail at email@example.com.
Writer: Steve Leer, (765) 494-8415, firstname.lastname@example.org
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