Local students feel impact of Kansas City Board of Trade closure
2:24 PM, Jun 28, 2013
3:25 PM, Jun 29, 2013
KANSAS CITY, Mo. - After more than 150 years in Kansas City, the Kansas City Board of Trade is closing Friday.
The Chicago Mercantile Exchange paid $126 million in cash in late 2012 to move the Kansas City Exchange to Chicago. Trading will be done electronically.
The Kansas City Board of Trade was established in 1856 by a group of merchants who converged in Kansas City to buy and sell their products. Financial advisor Douglas Coe said it brought together communities and people and is part of the reason why Kansas City began to thrive.
"From Iowa, from Kansas, all throughout the Midwest, if you wanted to buy or sell wheat, that was the central meet, the Exchange at the Kansas City Board of Trade," Coe said. "It was a central part to our city for so long." Most recently, it handled the nation's largest wheat market. Hard, red winter wheat makes up 44 percent of the wheat harvest in the U.S.
"Kansas City wheat is the wheat that you use to make bread," Tim Anderson, managing director of commodity products at the Chicago Mercantile Exchange, said. "Chicago wheat, the soft wheat, is the wheat they use to make cake. It's pretty quick to figure out that there is a lot more bread consumed in the U.S. then there is cake. Globally, the wheat it represents is a much larger market than the soft wheat product that our futures contract represents."
It's more than just wheat trading that Kansas City is losing with the closure of the Board of Trade. Sierra Williamson has spent the last eight summers attending Coe's Bulls and Bears Investment Camp for children.
Coe started the camp 22 years ago to teach children about how to manage their money, investments and the stock market.
"The camp is just one of those places where we can take what is complex to an adult or a child and break it down into simple terms so they no longer feel intimidated to invest in finance," Coe said.
Williamson was one of those children who didn't know much about the markets or finance when she started the camp when she was 11-years-old.
"It exposed me to things that I never understood or never even thought about looking at," Williamson said, "I started seeing how companies gain money."
For years, the camp would wrap up with a rare visit to the floor of the Kansas City Board of Trade.
"It's amazing because in camp, you learn about this and finally, not only do you get to see it, you get to participate in it," Coe said.
Stepping into the pit and trading with the actual traders was an experience Williamson will never forget.
"I hadn't always had an open personality of talking to people," Williamson said, "I felt like when I was on the floor, I was a different person, so it started helping me."
This fall, she is headed to Tennessee State University and plans to study accounting or finance.
"That's what really prompted me," she said, "Just going to the Board of Trade and seeing all the tickers and numbers at the top and seeing how they can change and then seeing a live trade."
The once-in-a-lifetime chance to be involved in something as significant as the Kansas City Exchange, has changed so many lives over the years.
"We're just very thankful and very much appreciative of all the many years the Kansas City Board of Trade opened their doors to our camp," Coe said, "It allowed us to touch the lives of kids throughout the area."
Now, Coe will have to find another way to give a real-life lesson in finance to future generations. He said the Federal Reserve has many options to teach kids about the importance of money management.
Meanwhile, previous generations will take what they've learned and go on to become the next financial experts in this electronic world.
"I would love to work on Wall Street," Williamson said.
Electronic trading will remain at the Kansas City Board of Trade until September. The closure does mean many job losses in Kansas City.