Grants Announced to Support Economic Growth for Rural Communities

Kansas State Agricultural Economics Faculty receives $2.5 million with five projects

Funding from the U.S. Department of Agriculture’s (USDA) National Institute of Food and Agriculture (NIFA) is expected to assist communities and regions in creating self-sustaining, long-term economic development through research and strategic planning.

Nearly $14 million in grants was awarded. Three agricultural economists at Kansas State University and a fourth at Purdue University who will join the K-State department later this year, received more than $2.5 million of those grant dollars to promote rural community development, economic growth and sustainability.

“These awards will allow our department to conduct research that can impact and improve the lives of rural Kansans,” said Allen Featherstone, professor and head of the K-State Department of Agricultural Economics. “The research areas of water management, voting and buying behavior, international trade and global climate variability, and value-based supply chain production on farms have various impacts to our Kansas farmers and rural citizens. We want this research to impact their livelihood and rural communities in a way that makes them sustainable and continuously moving forward.”

The projects for Kansas State, each totaling around $500,000, include:

Aquifer depletion and water management

chatura_ariyaradne_2013The project director for this grant is Chatura B. Ariyaratne, research assistant professor. He will study how the reduced availability of irrigation water and rising pumping costs due to groundwater depletion make management decisions more critical for the sustainability of agriculture.

“The economies of large regions such as the Great Plains are dependent on groundwater availability, making aquifer depletion a much-discussed policy and research issue,” Ariyaratne said. “Greater volatility in crop and energy prices has added more uncertainty to farmers’ cropping and irrigation decisions.”

This project focuses on the role of changing prices, technology, and climate on aquifer depletion, and the performance and impacts of different water management policies in the face of these uncertain trends.

Other co-project directors from K-State’s agricultural economics department include, Jeffery Peterson, professor; Nicolas Quintana Ashwell, Ph.D. candidate and graduate research assistant; Nathan Hendricks, assistant professor; Brian Briggeman, associate professor; and Bill Golden, research assistant professor. Bridget Guerrero is a collaborator on the project and is an assistant professor of Agricultural Business and Economics in the Department of Agricultural Sciences at West Texas A&M University.

Voting and buying behavior

Tonsor-colorAccording to Glynn Tonsor, agricultural economist with K-State Research and Extension and project director for this award, the U.S. public increasingly sends mixed signals in their voting and buying behaviors resulting in ‘unfunded mandates’ that significantly add complexity to society’s challenges of feeding a growing population.

“The consumers’ mixed signals are providing a knowledge gap among our industry leaders and decision-makers,” Tonsor said. “This limits informed decision-making when it comes to key decisions in the agricultural industry that make a difference in how we are feeding our growing population.”

The long-term goal of this project is to substantially increase understanding of the existence, drivers, and implications of differences in voting behavior and consumer food buying behavior.

Co-project directors for this award are Kathleen Brooks, livestock economist and extension specialist at the University of Nebraska-Lincoln; and Bailey Norwood, professor, Oklahoma State University Department of Agricultural Economics.

Understanding and forecasting changes in consumer demand for disaggregated meat products

According to Glynn Tonsor, co-project director for this award, there is an increasing need to better understand changing consumer preferences for meat products. To date, most consumer research either uses very aggregated, nationally representative data or involves surveys at a single point in time that convey a “snap shot.” This research will further develop and build upon existing consumer tracking surveys.

Tonsor will work with collaborators at Oklahoma State University to assess how stable consumer preferences are when assessed in regular nationwide monthly surveys and compared to other more commonly available data and information sets. This research ultimately will provide more accurate and timelier information on key issues regarding consumer food preference and lead to better decisions among producers and policy makers.

Jayson Lusk, Regents professor and Willard Sparks endowed chair for Oklahoma State’s agricultural economics department, is the project director for this award.

The role of international trade in adapting U.S. agriculture to increased global climate variability

NelsonVilloria-March2015_Nelson B. Villoria, an agricultural economist at Purdue University who will join the K-State faculty later this year, was awarded monies to study how more frequent extreme weather events are expected to increase the volatility of U.S. crop yields and the income stability of agricultural sectors.

“Global trade is an important source for stabilizing markets. Our study hypothesizes that climate shocks simultaneously affecting the U.S. and other global regions during a given marketing year reduce the ability of the trade system to mitigate shortages resulting in sudden sharp price changes,” he said. “Our study seeks to understand how stockholding and international trade can help adapt U.S. agriculture to a changing climate, particularly to disruptions associated with increased variability.” 

Co-project directors for this award are from Purdue University. They include Thomas Hertel, distinguished professor of agricultural economics; Dev Niyogi, professor of regional climatology; Paul Preckel, professor of agricultural economics; and Hao Zhang, professor of statistics.

Impacts of values-based supply chains on farms

Hikaru PetersonHikaru Hanawa Peterson, project director of this grant and K-State agricultural economics professor, will study the impacts of values-based supply chains (VBSCs) on small- to medium-sized farms.

“These supply chain alliances are distinguished by two sets of values: one based on product attributes and the other based on shared ethics among participants in the chain,” Peterson said. “While there is a growing understanding of the organizational dimensions of VBSCs, very little has been documented to date about their extent or characteristics and the actual impacts for farmers.”

Researchers will work to better understand, evaluate, and improve the performance of VBSCs as profitable outlets for diverse, small and medium-sized farms. “The project outcomes include new opportunities for farms and VBSCs to build farm profitability, expand access to healthy foods for communities, and contribute to the development of more environmentally sustainable and equitable regional agrifood systems,” Peterson said.

Co-project directors for this grant include Gail Feenstra, academic coordinator with the University of California-Davis’ Agricultural Sustainability Institute; Marcy Ostrom, small farms program leader with the Washington State University Center for Sustaining Agriculture and Natural Resources; and Keiko Tanaka, associate professor of sociology at the University of Kentucky.

NIFA made the awards through the Agriculture and Food Research Initiative’s (AFRI) Foundational Program, which supports projects that sustain and enhance agricultural and related activities in rural areas and to protect the environment, enhance quality of life, and alleviate poverty. For more information, visit www.nifa.usda.gov.

A fact sheet with a complete list of awardees and project descriptions is available on the USDA website.


Story by: Elaine Edwards – elainee@ksu.edu K-State Research and Extension

For more information: Amanda Erichsen, Department of Agricultural Economics – aerichsen@k-state.edu

This news release from K-State Research and Extension is posted at http://www.ksre.ksu.edu/news/story/rural_communities032315.aspx.

Here’s the Latest from the College of Ag: Ag News Now

In this edition:
Hoegemeyer Cares Scholarship Due April 1
The Hoegemeyer Cares Scholarship program has come out again this year! Hoegemeyer will award four $500 scholarships to students majoring in an agriculture-related field. To learn more check out the website! http://www.therightseed.com/home/2015-hoegemeyer-cares-scholarship/148

Diversity Programs Office (DPO) Update
The DPO would like to share information about their events:
• On March 11th the MANRRS Chapters held a Beef Steak Tasting Panel fundraiser. Thank you to the 23 MANRRS Members and Faculty that participated in the panel and the fundraiser. It was a great success and helped to fund the MANRRS trip to the MANRRS National Conference.
• The Diversity Programs Office and the Kansas State MANRRS chapter partnered together to send 9 students to the 30th Annual MANRRS Career Fair and Training National Conference in Houston, TX this week, March 25th to March 29th. The 2015 K-State MANRRS Chapter delegation includes 9 student members that will compete in a number of contests. At last year’s conference senior Taneysha Howard, Agricultural Communications and Journalism major, placed 1st in the National conference theme contest where her entry “Thirty Years of Triumph: Branching Out and Excelling to Greater Heights” is being featured on all conference items this year.
• Nicodemus Educational Camp will be held this summer during the weeks of June 8-12, 15-19, and 22-26 and they are looking for Senior Camp Mentor/Counselors Position. As a Camp Mentor/ Counselor you would be responsible for planning, leading, and implanting core and non-core programs and experiences for youth in a small group setting. To fill out the job application and for more information about the camp please go to http://www.nicodemuscamps.com/ or contact Dr. John Ella Holmes at johnella@ksu.edu. The application deadline is this Friday, March 27th.

Please continue to look for more diversity events as we continue to advertise. We appreciate your support. For more information about upcoming events or to collaborate with the DPO, please call 785-532-5793 or contact Dr. Zelia Wiley, Assistant Dean of Diversity, zwiley@ksu.edu. –Zelia Wiley​

Questions about Ag News Now? Contact us atgmkoester@ksu.edu

Irish beef now available in U.S. for first time in 15 years

For the first time in decades, you can enjoy beef imported from Ireland for St. Patrick’s Day. Trade and agricultural experts from Kansas State University say this “green beef” could open the door for trade agreements with other countries in the European Union.

In January, the U.S. announced it was lifting a ban on beef imports from Ireland after more than 15 years.

Cattle“This is significant for the Republic of Ireland because it is the first of the European Union nation state members to regain market access in the beef sector in the United States following the bovine spongiform encephalopathy, or mad cow disease, outbreak in the late 1990s,” said Justin Kastner, associate professor of food safety and security at Kansas State University.

The Irish beef is being termed “green beef” because the cattle are grass-fed and not treated with hormones. Sean Fox, professor of agricultural economics, says because this is a niche market it will have little overall effect on the beef market in the U.S.

“The projected volume of imports from Ireland is on the order of 20,000 metric tons per year, which is approximately 2 percent of current U.S. beef imports,” Fox said. “It will compete in a relatively small, premium price niche market in the U.S.

The risk of mad cow disease in Ireland is considered extremely low.

“Significant regulatory progress has been done to eliminate BSE,” Kastner said. “The U.S. Food and Drug Administration instituted a ruminant-to-ruminant feed ban, which basically prohibited certain categories of animal protein from being fed back to ruminants. The World Organization for Animal Health based in Paris has developed new risk categories to classify countries according to their BSE risk status.”

Fox says Ireland is the EU’s largest beef exporter and ranks among the world’s top exporting countries. In time, he says other European countries will regain access to the U.S. market.


For more information, contact:
Justin Kastner, 785-532-4820, jkastner@k-state.edu
Sean Fox, 785-532-4446, seanfox@k-state.edu

Written by: Lindsey Elliott, 785-532-1546, lindseye@k-state.edu

http://www.k-state.edu/media/newsreleases/mar15/greenbeef31715.html

K-State Agricultural Economist Following Avian Influenza Developments

Poultry bans by overseas buyers could weigh on pork and beef, as well as poultry prices.

News that more than 40 countries have banned poultry imports from Minnesota after a lethal strain of avian influenza was confirmed in a turkey flock there has now been compounded by news of confirmed cases in Missouri and Arkansas turkeys.

How long those bans are in effect and whether more countries stop buying poultry from Minnesota or other parts of the United States will determine what, if any effect the ban will have on poultry, beef and pork prices, said Kansas State University agricultural economist, Glynn Tonsor.

The outbreak linked to H5N2 avian influenza in Minnesota, confirmed by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service in early March, was the first finding in an area called the Mississippi Flyway. That outbreak killed 15,000 birds in about a week.

H5N2 has now also been confirmed at two commercial turkey farms in Jasper and Moniteau counties in Missouri and a commercial turkey flock in Boone County, Arkansas.

No human infections with these viruses have been detected, according to a March 10 APHIS statement, but state officials are working with poultry workers at the affected farms to ensure they are taking proper precautions.

“If additional countries make announcements banning U.S. poultry products from either specific regions or the country entirely, that would result in U.S. poultry products being diverted to other customers,” said Tonsor, who is a livestock market specialist with K-State Research and Extension. “In some cases this is other foreign customers and in other cases, more poultry will be consumed here domestically. In both cases, the diverted products going to alternative channels will occur at lower transaction prices. Otherwise they would have voluntarily been re-channeled already.”

As poultry prices decline from these events, he said, the spillover on both beef and pork is expected to be adverse for those industries.

“Narrowly, with lower poultry prices, we typically see pressure on pork and beef demand as the three meats are substitutes and collectively comprise the vast majority of red meat and poultry production and consumption,” said Tonsor, who is a livestock market specialist with K-State Research and Extension.

The biggest uncertainty, he said, is the exact duration and extent of poultry trade bans: “We know the directional impacts, but the economic magnitude is largely a function of the duration and extent which are yet to be established.”

In a March 11 statement, the Kansas Department of Agriculture said it is monitoring a control zone in southeast Kansas, including Cherokee and Crawford counties, after the avian influenza case was confirmed in Jasper County, Missouri.

Avian influenza exists naturally in many wild birds and can be transmitted by contact with infected animals or ingestion of infected food or water.

Kansas backyard poultry producers in the Crawford and Cherokee county area are asked to self-report their flocks to the Kansas Department of Agriculture at 785-564-6601, in order to help them monitor the situation and control any spread of the disease.

The combined value of U.S. production from broilers, eggs, turkeys, and the value of sales from chickens in 2013 was $44.1 billion, according to the USDA.

Information on the H5N2 avian influenza outbreak is available on the USDA APHIS website: http://www.aphis.usda.gov/wps/portal/?urile=wcm:path:/aphis_content_library/sa_our_focus/sa_animal_health/sa_animal_disease_information/sa_avian_health.


For more information:
Dr. Glynn Tonsor – 785-532-1518 or gtonsor@ksu.edu


Story by: Mary Lou Peter
mlpeter@ksu.edu
mlpeter@ksu.edu K-State Research and Extension

Meat and Poultry Recalls: What Food Firms and Investors Should Know

A K-State study used stock market prices to determine costs of recalls to food firms and what recall factors are most impactful economically.

Food safety is top-of-mind among many consumers and producers of food. It is also a continuum, because the more a food firm spends on effective technologies and protocols to ensure safe food, the greater chance the foods are protected against contamination.

Despite a blanketed desire to keep foods safe, eventually food firms reach a price point—a limit they can spend feasibly to ensure staying in business and giving consumers an affordable product, said Ted Schroeder, professor of agricultural economics at Kansas State University.

“The more a company knows about the anticipated impact of a recall event, the better it can make a decision about adopting new food safety protocols, new technologies or new surveillance methods to reduce the probability of a food safety breach,” Schroeder said.

Schroeder, along with Veronica Pozo, assistant professor of applied economics at Utah State University, recently found that when food firms face a meat or poultry recall, several factors determine how that recall affects the firm’s bottom line. The most impactful factor is the class of the recall, which determines if a severe human health hazard is involved. Other factors include the size of the recall, size of the firm, if the firm has prior experience dealing with a recent recall and the media coverage surrounding the event.

A close look at publicly traded food firms
The researchers examined meat and poultry recalls that took place between 1994 and 2013, based on availability of recall data from the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS). The FSIS showed more than 1,200 meat and poultry recalls happened during that time, and 163 of those recalls came from 31 different publicly traded firms.

Although 163 of more than 1,200 recalls may seem like a small number, publicly traded firms showed almost half of the total meat and poultry products recalled, said Pozo, who was a K-State doctoral student when the research was conducted. In fact, 277 million out of 638 million total recalled pounds, or 43 percent, came from publicly traded firms.

Although it’s difficult to obtain financial data from firms and measure total direct costs and losses of revenue from a recall, price reactions in the stock market surrounding a recall event tend to indirectly reflect all the private costs, Pozo said.

“Some recalls would have gotten out to the consumer, and some would not have,” she said. “Regardless, calculating the actual physical cost of a recall can be quite daunting. You have to track volume of product, determine if the product was disposed of or the firm got an alternative value for it, and the cost of all people involved, including sales losses and liability costs.”

“Our claim is all private costs—costs the company itself ends up realizing—will ultimately be reflected in the stock price through the value of the firm,” Schroeder said. “The stock market is efficient, meaning it rapidly incorporates information and embeds it into the stock values. It is a widely accepted method for evaluating event studies.”

What the stock price does ignore is public costs, he said. For example, if someone gets sick from a recall and it never resonates back to the firm, someone else likely paid for that. It wouldn’t necessarily show up in the stock price.

“Our goal was to look at individual, private firm costs, because if I’m a company that’s in the food processing or merchandising segment, I need to have a sense of what the impact of these (recall) events can be on my company,” Pozo said. “If we show firms how costly a recall can be, then they will be able to conduct a cost-benefit analysis to decide if it’s worth it to implement additional (food safety) technologies.”

In addition, Pozo said the study shows investors the importance of finding out more about a firm’s food safety protocols.

“I’ve seen publicly traded companies that went bankrupt after one recall,” she said. “And although companies do as much as they can to avoid these types of events, food safety outbreaks are still possible. Firms must have a good plan in place. Investors must find out about those plans before investing.”

Recall reflections in stock prices
The researchers found it took about four to five days, on average, for the stock price to reflect a recall. If a major health hazard was part of the recall, the stock price could take a hit earlier, potentially within one day.

Investor and firm interests often go hand-in-hand during a recall, Schroeder said. In the stock market, especially as a recall progresses, there’s uncertainty and emotion.

“Our results show investors do respond fairly quickly, within the day of the recall or as soon as the markets open after the recall,” he said. “As the recall continues to unfold, the market will adjust, and it’s either going to go down further or readjust back up if the confidence and handling of the recall is made known.”

Regardless if a health hazard was part of the recall, the researchers found the stock price returns decreased on average 0.63 percent within five days. A health hazard jumped that decrease to an average of 1.15 percent, which could translate to a loss of hundreds of millions of dollars for some firms.

A breakdown of factors that most impacted stock price reactions
Severity: Class I recalls pose a major health hazard compared to Class II and Class III. The researchers found the seriousness of the human health risk, brought on by E. coli O157:H7, salmonella or listeria as examples, would impact shareholder losses to the greatest extent.

Recall size: The larger the recall, the more financial damage the firm would face, according to the researchers. Knowing that recall sizes matter, it may behoove firms to test products in smaller lot batches to help prevent a large-scale recall, but they would need to weigh the costs to implement this practice.

Further, firms should know that combining acute health urgency in a Class I recall with a large recall size would make the most sizeable market reaction.

Firm size: Some of the financial hit from a sizeable Class I recall can be countered if the firm is large and more diverse, said the researchers. In addition to immediate private costs, insurance premiums for the firm also would likely rise.

A large firm won’t have near the stock market impact as a smaller publicly traded firm that relies heavily on that particular meat or poultry product as its main line of business. Smaller, more homogeneous firms are more apt to go bankrupt from one recall.

Firm’s experience: Say a firm experienced one recall and within a year faced an additional recall. The researchers found the impact of the second recall would still be adverse, but because the firm showed it could manage a recall situation, all the possible repercussions from the second recall didn’t have as much effect as the first.

The firm’s customers, investors and consumers are often more at ease after the firm shows it can bounce back from one recall. If a company is experiencing one of its first recalls, it might benefit from leaning on experts who know how to navigate a recall to minimize financial damages.

Media: Media has an important effect on how a processing or manufacturing firm’s customers, investors and consumers perceive the company. The larger the number of media articles about the recall event, the more damage it would likely cause the firm related to that particular recall.

Most of the media articles related to the recalls under study were informative, but they carried a negative tone, according to the researchers. Results suggest value in firms having a media plan in place if a recall were to occur.

More details about these and other recall factors are available in the full report, “Costs of Meat and Poultry Recalls to Food Firms,” which can be found on K-State’s Ag Manager website (http://www.agmanager.info/livestock/marketing/FoodSafety/Pozo_Schroeder_FactSheet_2015.pdf).

For more information, contact Veronica Pozo at veronica.pozo@usu.edu or 435-797-3863; or Ted Schroeder at tcs@ksu.edu or 785-532-4488.


Story by:  Katie Allen
katielynn@ksu.edu
785-532-1162
K-State Research and Extension

Farm Bill Update: Clarification about Market Year Average prices released on March 30

In his recent update of Marketing Year Average (MYA) prices, Art Barnaby noted that the February prices would be released on March 30, which would only leave one day to make a change to the program selection. He was NOT encouraging farmers to wait to do that, but rather noting that there really wouldn’t be time to make changes with any new information that might be available then.

The paragraph that has caused some confusion has been modified. Note the bolded and italicized text:

“USDA will release one more monthly price on March 30, 2015 prior to the final Farm Bill program selection date.  Farmers would only have 1 day to call FSA to change their program selection.  As a result some farmers have been trying to delay their county FSA appointment times. However, because of the low weight for the February price, there be will little if any additional information provided by the March 30 price.  As a result, farmers should be making the program selection now.  There is no way everyone can sign up on the last day.  There are lot of unknowns that will have greater impact on the final results and include price for the next 5 years, the distribution of the county yield loss distributions, etc. KSU is offering a webinar on March 11, and will present a summary and a final look at the Farm Bill decision.  For more information or to register, the link is: http://www.agmanager.info/events/Webinars/default.asp. The registration fee is $25 per line with no limit on the number of people viewing the webinar per line.”

To view the entire article in PDF: http://www.agmanager.info/crops/insurance/risk_mgt/rm_pdf14/AB_Est-MYA.pdf

Faster loading but less formatting HTML at: http://www.agmanager.info/crops/insurance/risk_mgt/rm_html14/AB_Est-MYA.asp

For more information or if you have problems registering for the webinar, contact Rich Llewelyn at 785.532.1504 or rvl@ksu.edu.

Final Farm Bill Webinar: Wednesday, March 11 – Register now!

The Agricultural Act of 2014: A Final Update – Webinar by Art Barnaby and Mykel Taylor

On Wednesday, March 11 at 11:00 a.m. central, the K-State Department of Agricultural Economics will offer an hour-long webinar to update farmers and others on the decision between selecting the Price Loss Coverage (PLC) vs. Agricultural Risk Coverage (ARC). This update will highlight some of the new resources available and also the Marketing Year Average (MYA) price estimates after the January prices are released. This will be the final KSU webinar before the sign-up deadline at the end of March.

Register at http://commerce.cashnet.com/KSUAGECON . Registration fee is $25. If you cannot attend the live webinar, a recording will be available for the same price. Register for the webinar and receive instructions of how to access recording, following the webinar.

For more information or if you have problems registering, contact Rich Llewelyn at 785.532.1504 or rvl@ksu.edu.

 


 

PREVIOUS UPDATES: Base Reallocation and Payment Yield update deadline that was originally today is now extended to March 31st! The deadline to make the program election remains as March 31st.

The link for the news release from USDA: http://www.usda.gov/wps/portal/usda/usdahome?contentid=2015/02/0051.xml&contentidonly=true

We also would like to highlight some new resources on AgManager, under Decision Tools: http://www.agmanager.info/policy/commodity/2012/default.asp

First off, there is now a map to show announced 2014 Kansas NASS County Yields: http://www.agmanager.info/policy/commodity/2012/Yields.asp

Taking that a step further, there is also a map to show Kansas projected ARC-CO payments for wheat, corn, sorghum, and soybeans: http://www.agmanager.info/policy/commodity/2012/Payment.asp Note that Jan. prices will be released at 3 pm today, so by Monday your estimate may change slightly to reflect the new price projections.

For complete information, we have have created a spreadsheet for all covered commodities in all U.S. counties that shows NASS yields, corresponding ARC-CO payments at different MYA price levels, AND tradeoff spreadsheets for 2015. Again, price estimates will be updated on Monday, but go ahead and take a look at this tool: http://www.agmanager.info/policy/commodity/2012/ARC-2014_Tradeoff-PLC-ARC-2015.xlsx


For more Farm Bill information, visit http://www.agmanager.info/policy/commodity/2012/.

 

K-State 2014 Farm Bill team reaches more than 4,000 Kansans

K-State 2014 Farm Bill team reaches more than 4,000 Kansans
AgManager.Info hosting upcoming webinar, updates to deadline

Farm producers and ranchers are facing many decisions regarding the Agricultural Act of 2014, also known as the 2014 Farm Bill.

To help with that decision-making, K-State Research and Extension held meetings throughout the state in January and February. Recordings of presentations offered at the meetings are now available online.

Mykel Taylor 2015 Farm Bill meeting in Wichita  “More than 4,000 people attended the meetings, with many attending more than one to improve their understanding,” said Mykel Taylor, assistant professor of the Kansas State University Department of Agricultural Economics. “Surveys at these meetings asked people to rate the value of the information presented on the programs details and the tool. An average of 89% of attendees rated the information as Valuable or Very Valuable on a four point scale (‘Not Valuable’, ‘Somewhat Valuable’, ‘Valuable’, or ‘Very Valuable’).”

Base Reallocation and Payment Yield deadline update
The Base Reallocation and Payment Yield update deadline that was originally February 27 is now extended to March 31.  The deadline to make the program election remains as March 31.

Final Webinar Update to be held Thursday, March 11Art Barnaby Wichita Farm Bill meeting 2015
Art Barnaby, agricultural economics professor, and Taylor will offer an hour-long webinar on Thursday, March 11, 2015 at 11:00 a.m. CDT to update farmers and others on the decision between selecting the Price Loss Coverage (PLC) vs. Agricultural Risk Coverage (ARC).

This update will highlight some of the new resources available and also the Marketing Year Average (MYA) price estimates after the January prices are released. This will be the final webinar before the sign-up deadline at the end of March.

Register at http://commerce.cashnet.com/KSUAGECON. Registration fee is $25. If you cannot attend the live webinar, a recording will be available for the same price. Register for the webinar and receive instructions of how to access recording, following the webinar.

Video list from Wichita Farm Bill meeting

In addition, updated information including many tools and resources are available at www.AgManager.info on the 2014 Farm Bill.

Additional information is available from Rich Llewelyn: rvl@ksu.edu or 785-532-1504.

New College of Agriculture ambassadors include seven students from Department of Agricultural Economics

On the evening of February 24, 2015, 34 Kansas State University College of Agriculture students joined the ambassador team in February. Newly selected agricultural economics students are:

  • Nolan Allison, Eureka
  • Coleman Forst, Marysville
  • Abigail Horn, McCoy, Colorado
  • Anna Setter, Humboldt
  • Halli Wigger, Troy
  • Youwei Yang, China

The agribusiness students are:

  • Kristin Stiebe, Kinsley
  • Rachel Zimmerman, Ulysses

The ambassador team aids in recruitment of prospective students and will represent the College of Agriculture at various events throughout the year. More than 800 prospective students are anticipated to visit the college this year to tour campus, sit in classes and hear personal K-State stories from the ambassadors.

A prerequisite to the application process involves passing the 8-week College of Agriculture Training program aimed at teaching the students about the college’s departments and programs. The application process included a written application and a simulation of a situation students would potentially face as ambassadors followed by an interview.

View the full list of new ambassadors.

Tonsor and Schroeder Examine Economic Implications of E. coli Vaccine Use

E. coli Vaccine Effective But Seldom Used in Feedlot Cattle: K-State Study Examines Economic Implications

When it comes to foodborne illnesses, few rival E. coli for the damaging effect it can have on humans.

Research shows that STEC-related bacteria cause more than 175,000 human illnesses per year with an annual direct economic cost ranging from $489 million to $993 million, said Kansas State University agricultural economist, Glynn Tonsor.

Shiga toxin-producing E. coli, often referred to as STEC 0157 or simply E. coli, is naturally occurring in cattle and though it does no harm to the cattle, can make humans sick. In some cases it is lethal. To reduce the chances that beef leaving their plants is contaminated with the pathogen, beef processors have implemented hazard control steps and also test their beef products for the presence of E. coli before they leave the plant.

Another potential way to reduce prevalence of E. coli is to vaccinate cattle in feedlots long before they are shipped to processing plants.

“Immunization through vaccination has been a commercially available pre-harvest intervention to reduce E. coli shedding in cattle for about five years,” said Tonsor, who is a livestock marketing specialist with K-State Research and Extension. “Despite demonstrated substantial improvement in human health the vaccine offers, it has not been widely adopted.”

In a recent study he, along with K-State colleague Ted Schroeder, also an agricultural economist, took a closer look at the potential economic impacts of incorporating animal vaccination into E. coli pre-harvest control practices.

A fact sheet is available at http://www.agmanager.info/livestock/marketing/FoodSafety/default.asp. Study results have been published in the Agricultural and Food Economics Journal at http://www.agrifoodecon.com/content/3/1/7.

The study made clear two primary reasons most feedlot managers don’t use E. coli vaccines. Because cattle themselves are not adversely affected by the pathogen, the presence of E. coli does not hinder cattle feeding efficiency so there are no production costs for feedlots directly associated with the prevalence of E. coli. In other words, it costs no more to feed cattle that have E. coli than it does to feed cattle that don’t.

Further, there is no well-established market that compensates producers for vaccinating for the pathogen. So generally, the price paid for cattle coming out of feedlots is the same whether the vaccine was used or not. Because administering the vaccine adds costs without direct economic incentives, most cattle feeders choose not to, Tonsor said.

Key findings from the K-State study include:

  • Given the current market setting, producer adoption of E. coli vaccination protocols is likely to remain limited. If such vaccinations were implemented, it would cost U.S. feedlots $1.0 billion to $1.8 billion in economic welfare loss over 10 years if demand didn’t increase with premiums for vaccinated cattle.
  • Retail or export beef demand increases could spur adoption by feedlot producers. Considering different scenarios, the study found that retail beef demand increases of 1.7 percent to 3.0 percent or export beef demand increases of 18.1 percent to 32.6 percent would be necessary to generate sufficiently higher fed cattle prices to offset the costs associated with vaccination.
  • Production cost decreases to either beef retailers or wholesalers (packers) could also provide an incentive for feedlot producers to vaccinate. The study indicated that cost declines of 2.2 percent to 3.9 percent for retailers or alternatively production cost declines of 1.2 percent to 2.2 percent for packers would be necessary to generate sufficiently higher fed cattle prices to cover feedlot adoption costs, making producers economically neutral to adoption.

“A key point of this research is that limited use of E. coli vaccinations in U.S. feedlots is consistent with the lack of current economic signals for producers to expand adoption,” Schroeder said. “Unless there is a substantial change in market signals presented to feedlot operators, limited use of E. coli vaccinations can be expected in the future.”


Story by: Mary Lou Peter, mlpeter@ksu.edu, K-State Research and Extension

For more information, contact Glynn Tonsor at 785-532-1518 or gtonsor@ksu.edu; or Ted Schroeder at 785-532-4488 or tcs@ksu.edu.

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