Monthly Archives: May 2013

Agricultural economics alumnus Steven Hunt earns Agricultural Alumni Association honor

Steve Hunt May 2013May 21, 2013 – The Kansas State University College of Agriculture Alumni Association recognized one of the founders of U.S. Premium Beef, a Kansas Wheat executive and a K-State entomologist for their contributions to agriculture and Kansas during its annual Wild for Ag events on May 4, at the K-State Alumni Center.

Steven Hunt, Liberty, Mo., received the 2013 Distinguished Alumni Award. He currently is an adviser to U.S. Premium Beef LLC, a marketing company that provides U.S. beef producers with an opportunity to retain ownership of the beef they produce from the ranch to retail. He helped found the company in 1996 and served as its CEO from its formation until January 2013.

After completing a bachelor’s degree in agricultural economics in 1981, Hunt worked in many areas of commercial banking including direct agricultural lending, credit training, finance, international and commercial lending, and pursued his lifelong interest in production agriculture.

Hunt has held a seat on the National Beef Packing Company Board of Directors for 16 years and is active in various trade and civic organizations, including the Federal Reserve Bank of Kansas City Roundtable, the American Royal Board of Directors, the Midwest U.S.–Japan Advisory Board, National Cattlemen’s Beef Association, Livestock Meat Industry Council, Boy Scouts of America and the Agricultural Marketing Resource Center Advisory Board.

He was named the college’s 2001 Outstanding Young Alumnus and the 2002 Distinguished Alumnus for the Department of Agricultural Economics. Beef magazine listed Hunt in its “Beef Top 40” of individuals who influenced the beef industry over the last 40 years. He also received the 2010 Jay B. Dillingham Agricultural Leadership and Excellence Award from the Agricultural Business Council of Kansas City.

Pictured above: Greg Zolnerowich (from left), professor of entomology, Justin Gilpin, CEO of Kansas Wheat, and Steve Hunt, former CEO and co-founder of U.S. Premium Beef, were recently recognized for their achievements by the Kansas State University College of Agriculture. Click here to read about the other honorees.

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Crop insurance a viable, economical risk-management tool

May 13, 2013 – The Federal Crop Insurance program has evolved from what was basically an experiment started to help farmers recover from the Great Depression and Dust Bowl to one of the most vital programs offered to farmers. Producers and their bankers rely heavily on crop insurance to provide a reliable safety net for crop production.

Art Barnaby

Art Barnaby

Art Barnaby, professor of agricultural economics at Kansas State University, gave an overview of the crop insurance program and the changes it has gone through for Sorghum U, an educational series sponsored by the Sorghum Checkoff, Sorghum Partners LLC, and High Plains Journal.

Crop insurance dates back to the 1930s when it was a government-run program with government employees doing both sales and service. Barnaby said that changed in 1980 when a public/private partnership was established with the passage of the Federal Crop Insurance Act. Four years later another major change came along with proven yields.

“Prior to that everything was set on a county yield number,” Barnaby said. “Those with lower yield tended to buy insurance and those with higher yields did not buy insurance. This led to unintended subsidies.”

Crop insurance continued to change with the addition of Market Value Protection in 1991, and Crop Revenue Coverage/Revenue Protection in 1996. The Agricultural Risk Protection Act came along in 2000 to encourage a greater number of farmers to participate, Barnaby said. The Federal Crop Insurance Reform Act of 1994 was passed, making participation in the crop insurance program mandatory for farmers to be eligible for deficiency payments under price support program, certain loans, and other benefits.

“Now about 270 million acres are insured,” Barnaby said. “A large number of farmers are now enrolled in the program largely due to the law change in 2000.”

In the last farm bill debate there were several proposals to reduce the costs of crops. These included limiting the premium subsidy for farmers and having a means test.

“It was forecast, as we saw the drought developing, that this would cost the government $40 billion, but that was clearly nonsense from the start,” Barnaby said. “It was a near impossibility, in fact.”

Barnaby pointed out that ad hoc disaster aid, Supplemental Revenue Election, and Agriculture Risk Coverage are just free crop revenue insurance.

“If you took the crop insurance program as it is and provided a 100 percent subsidy that would in effect be a disaster program,” Barnaby said.

The use of put options in crop insurance is another recent change. Barnaby said all USDA risk management tools including the Average Crop Revenue Election; Supplemental Revenue Election, marketing loans and ARC are derivatives of options and insurance. Adding put options and insurance to revenue insurance is more efficient than insuring price and yield separately. A major change from previous crop insurance contracts is that all contracts now use the same projected price based on new crop futures prices.

“As a result all Common Crop Insurance Policy contracts have the same yield guarantee,” Barnaby said.

Beginning in 2011 with CCIP contracts any additional revenue that is coming from revenue protection has to be due to the put derivative that is built inside the insurance contract.

“So if prices go down the payment will be higher under this contract than under yield only, but all of the additional payment has to come from the price component,” according to Barnaby.

Out of the top 12 most common crop insurance contracts for grain sorghum in South Dakota the top three were revenue protection contracts. Barnaby said this is the case all across the country.

“This is the cheapest form of price protection you will ever get at less than one cent per bushel,” Barnaby said.

Many farmers who would never have used crop insurance in the past have changed their minds. According to the Risk Management Association in 2012 farmers invested more than $12 million in premium for more than 6,600 crop insurance policies. Last year Federal Crop Insurance protected nearly 70 percent of all corn acres, 80 percent of all soybean acres, and 50 percent of all wheat acres.

Written by Doug Rich, High Plains Journal.

O’Brien blog addresses global and domestic grain market situation

May 10, 2013 – By the very nature of his work as an extension agricultural economist, Kansas State University’s Dan O’Brien is used to reaching out to farmers, agri-businesses and others with the latest research-based information pertaining to grain market analysis. And he’s added another tool to help disseminate that information.

O’Brien, a crops marketing specialist with K-State Research and Extension, has launched the “Focused on Grains” blog, available at www.ksugrains.wordpress.com. It addresses everything from U.S. Department of Agriculture reports to supply and demand factors to Kansas Agricultural Statistics data – anything that’s affecting or may affect Kansas grain markets, O’Brien said. The blog includes his monthly market outlook and price forecasts, as well as weekly grain market updates.

Focused on Grains also includes links to related resources, including interviews aired on the Agriculture Today radio show, production projections from the recent Wheat Quality Council’s Kansas Wheat Tour, bioenergy issues and relevant information from other state extension services.

“It’s as if I have someone in my office and we’re having a discussion about the various factors affecting wheat prices, for instance. But this way I can communicate grain marketing information from KSU with a lot more people via the Internet,” said O’Brien, who noted that he continues to give presentations at extension field days and conferences around the state and nationally, and posts information on the extension agricultural economics website: www.agmanager.info.

Article by K-State Research and Extension News.

Department of Agricultural Economics represented by 2 of 15 new inductee members of Blue Key

The Kansas State University chapter of Blue Key, a nationwide honor society for college seniors, has initiated 15 new members for the 2013-2014 academic year. Of these 15 new members, Kassie Curran and Reagan Kays represent the Department of Agricultural Economics.

Blue Key is a premier honor society that recognizes college seniors at institutions of higher education for excellence in scholarship, leadership, and service. Members of Kansas State University’s Blue Key chapter embody the society’s motto of “Serving, I Live” by providing leadership mentoring and training programs on campus and throughout the state of Kansas.

The honor society sponsors and coordinates various activities and programs at the university, including the Catalyst Self Development Experience; Quest, the freshmen honorary; ULead Leadership Consulting for college and high school students; a high school leadership conference; and the annual Leadership Appreciation reception to recognize students and organizational advisers for their leadership on campus. Blue Key also annually awards more than $15,000 in scholarships to Kansas State University undergraduates each year.

Kassie Curran, food science and industry, Farlington. Curran is earning a minor in agricultural economics. She also conducts research with Sean Fox in the department. Curran has served as president of the College of Agriculture Ambassadors, has been active in Collegiate Farm Bureau and Collegiate Cattlewomen, and has served as state vice president for the Kansas FFA Association. She is a College of Agriculture scholar, and is involved in the Frontier Food Safety/Food Security Research Program. She will serve as director of alumni and outreach for Blue Key.

Reagan Kays, agribusiness, Weir. Kays has been active in Alpha Gamma Rho fraternity, the Kansas State University Student Foundation, College of Agriculture Ambassadors and the university’s Student Governing Association. He has also been involved in the Agricultural Economics/Agribusiness Club, as well as Collegiate Farm Bureau. Kays will serve as president of Blue Key.

Click here to read about the other new inductees.

K-State NAMA team competes in national competition

2013 NAMA teamMay 3, 2013 – A team of students from Kansas State University finished in third place at this year’s national marketing competition hosted by the National Agri-Marketing Association. The competition was April 17-18 in Kansas City, Mo.

Team members majoring in agricultural economics or agribusiness include Kendal Clawson, Kellie Jackson, Taylor Peterson, Michelle Hill, Cassie Kniebel (minor), Brady Rundel, Annie Patterson, Preston Lagemann, Hannah Miller, Kelsey Harris, Kurtis Clawson (minor), and Kendall Voth. Other team members included Gordon Harton, Logan Britton and Marie Klimova. The team is coached by David Lehman, instructor in the department of marketing.

“Every team participating in the marketing competition does an excellent job of developing a thorough marketing plan, a process that takes most teams the majority of the academic year to complete,” said Kristen Marshall, the association’s careers committee chair. “Those teams that advanced to the finals truly did exceptional work on their projects. Each year I am amazed by the talent of these teams. They’re truly an awesome group that we hope will continue in agricultural marketing as they begin their professional careers.”

K-State’s team had 15 students involved with this year’s project to market, “Omega Beef,” omega-3 enriched beef. The product was developed as a solution for health-conscious consumers to have their intake of omega-3 fatty acids with a beef flavor and taste. The team spent the last several months conducting market research, writing the marketing plan and developing a presentation.

In the competition, students decide on a project and develop a plan to successfully bring the product or service to the marketplace. In developing their marketing plan, students follow the same practices and principles used by today’s marketing professionals. Teams submit a written plan summary prior to the competition and then make a formal presentation of their marketing plan to a panel of judges at the competition. The judges’ panel consists of marketing and agribusiness professionals.

Overall, 29 student chapters of the National Agri-Marketing Association participated in the marketing competition. The competition is part of the association’s annual conference and trade show. More than 350 student members attended the conference.

“The marketing competition is a great learning tool for these students and provides them with some really good practical experience,” Marshall said. “Our congratulations to K-State for their exceptional work and success at the competition this year.”

Article written by Logan Britton, NAMA team member.

Picture provided by AgWired.