Monthly Archives: June 2013

Agricultural Economics senior earns spot as vice president of Mortar Board for 2013 – 2014

June 25, 2013 – Mortar Board, the national senior honor society that promotes scholarship, service and leadership at Kansas State University, has 29 new members for the 2013-2014 school year.

One of the new members and the new vice president is Brock Burnick, senior in agricultural economics and pre-law, from Mulberry. Burnick has been a resident assistant with the university’s residence halls and served in several community service organizations. He is president of Alpha Zeta, the agricultural honorary, where he also served as coordinator of the SWIPE Out Hunger project.

Along with their demonstrated excellence in service and leadership, Mortar Board members must have a minimum 3.0 GPA. Members provide service to the campus, community and the state of Kansas with activities like First Book, which fosters literacy by providing children access to books, and an annual reception to honor select faculty members for their achievements in teaching, advising or mentoring Kansas State University students.

The university’s chapter of Mortar Board has been recognized as one of the best in the nation, winning the national organization’s Golden Torch award for six years in a row. The honor is presented to the most outstanding chapters in the nation.

Click here to read about the rest of the new members.

Advertisements

Kansas Net Farm Income Dipped in 2012 but Crop Insurance, Prices Provided Support

Statewide Net Farm Income Averaged $151,127; Varied Widely by Region

June 19, 2013 – Judicious use of risk management tools and other key management decisions saved the day for many Kansas farmers last year even as the state endured its worst drought in decades, according to Kansas Farm Management Association program director, Kevin Herbel.

“Without a doubt, the farm income picture would look very different without crop insurance,” said Herbel as he described highlights of the 2012 KFMA Executive Summary released recently, which sheds light annually on the financial picture of KFMA member farms.

The data, available at Kansas Farm Management Association, showed net farm income across 1,290 of the KFMA member farms last year averaged $151,127, down from $166,375 in 2011 but above the five-year average of $141,288. According to Herbel, during 2012 the average KFMA farm had crop insurance proceeds of $87,998, which accounts for 14 percent of the value of farm production (VFP) and 58 percent of net farm income for the year.  In 2011, crop insurance also was important as 45 percent of the net farm income (12 percent of VFP) was from crop insurance proceeds.

Again in 2012, net farm income varied widely by region, with northwest Kansas averaging $288,176 and southwest averaging $98,071. In the north central part of the state, net farm income averaged $114,357; in south central, $160,703; northeast, $138,024 and in southeast Kansas, $150,644.

The differences by region are at least in part, a reflection of the different types of farming operations, irrigation options and severity of the drought itself, KFMA economists said.

The value of farm production averaged $620,109 in 2012, up from $607,854 in 2011 and the five-year average of $543,418.

The KFMA annual report is, to some extent, a reflection of Kansas agriculture statewide. It also provides yearly comparisons and between different types of farming operations.

“The average net farm income number at $151,127 was higher than what you’d think, given the drought,” said Gregg Ibendahl, associate professor of agricultural economics at Kansas State University. “Thanks to crop insurance, we stayed above the five year average of about $141,000. Across the state, although we had dry conditions, overall net farm income wasn’t bad.”

About half of the KFMA member farms made $100,000 or less and 10 percent lost money, but about eight percent made more than $400,000, said Ibendahl, who is a farm management specialist with K-State Research and Extension.

In addressing the disparity, he noted that 20 percent of the farms that made more than $400,000 were in the northwest part of the state which is also home to some of the state’s largest farms, so economies of scale come into play somewhat.

Ibendahl noted that in any given year, it’s typical to have about 10 percent of KFMA member farms lose money and 10 percent that break even. That means that about 80 percent are actually making money.

Crop farms fare best

Crop operations, both dryland and irrigated, had net farm income that exceeded the previous year and the five-year average. Net income for dryland farming operations in 2012 averaged $166,174, up from the previous year at $157,296 and above the five-year average of $151,417. Net income for irrigated crop farms averaged $323,889, down from $449,115 in 2011 but up from the five-year average of $302,420.

“If you were a cattle person, and if you weren’t backgrounding or finishing, you probably did okay. If you were backgrounding or finishing – that’s the group that took it on the chin last year,” Ibendahl said, noting that grain and feed costs during the drought cut deep into those operations’ net income.

Those cattle operations described as backgrounding-finishing showed an average net income of $46,519, sharply lower than the previous year at $397,138 and below the five-year average of $146,297.

“Cow-calf operators did somewhat better,” Ibendahl said. Operations listed as “cowherd” on the summary saw an average net income of $98,178, up from $60,016 in 2011 and above the $37,859 average.

Overall differences and return on net worth

“High income farms made quite a bit of money on the price side by selling their product, but they also did a good job of holding expenses down,” Ibendahl said. “Conversely, the lower 25 percent may have had some debt issues that weighed on their debt-to-income ratio.

He noted that overall, KFMA members showed a return on net worth (equity) of 5.74 percent: “That’s better than any savings account or CD right now. It’s been 7.3 and 7.67 the prior two years, so it’s down, but still good.”

Ibendahl said that overall debt levels reflected in the summary are not too high, which paints a pretty healthy picture for Kansas agriculture.

Herbel added that while total dollars of debt per farm have increased from $368,031 to $438,155 during the past five years, the debt-to-asset ratio for KFMA farms has declined from 28.3 percent in 2008 to 21.5 percent in 2012. During this same time period, the current ratio, which measures current assets compared to current liabilities, has increased from 3.00 to 3.41, indicating an improved current financial position for KFMA farms.

Whether a Kansas farmer is a KFMA member or not, they can look at the numbers and compare them to their own, Ibendahl added. That can help determine areas in which they’re doing a good job or where they may want to focus more effort.

“We like to say that benchmarks don’t give you the right answer, but they do tend to point you in the direction you should go,” Ibendahl said.

The Kansas Farm Management Association, based at Kansas State University, is part of K-State Research and Extension. KFMA agricultural economists, who are faculty members in K-State’s Department of Agricultural Economics, work cooperatively with members, providing production and financial management information for Kansas farmers through on-farm visits, enterprise analyses, and other educational programs and resources.

http://www.ksre.ksu.edu/news/story/farm_income061913.asp

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

Kevin Herbel, KFMA Program Administrator – kherbel@ksu.edu; Gregory Ibendahl, Associate Professor, Department of Agricultural Economics – ibendahl@ksu.edu

MAB’s annual Agribusiness Professional Development Series to be held August 8-9 at Cargill

K-State’s Master of Agribusiness Program is hosting its 5th Professional Development and Alumni Reunion event. This event is open to MAB students, alumni and all professionals in the agribusiness industry.

The event is August 8-9 at Cargill’s Headquarters in Wayzata, Minnesota. This event is open to those interested in discussing hot-button topics affecting the global food and agriculture environment with industry experts.

Tentative agenda topics include what could go wrong, regarding food pricing and risk; how humans think about and make decisions; improving productivity with crop yields and technology; Global Implications: They aren’t making more land, are they?; and updates regarding research and extension work being conducted in Russia and the Former Soviet Union, and Africa.

The early-bird registration deadline is July 19. Click here for more information regarding registration and hotel accommodations.  Please contact Mary at mjbowen@ksu.edu or 785-532-4435, for more information.

Department of Agricultural Economics seeks to fill assistant professor position

The Department of Agricultural Economics at Kansas State University seeks to fill a tenure-track Assistant Professor position. The position is budgeted at 60% teaching and 40% research.

The Department has a reputation for excellence in all three functions of the University’s land grant mission (teaching, research, and extension). The successful candidate is expected to be an active contributor to the Department’s teaching and research programs. The Department offers B.S. degrees in agricultural economics and agribusiness, M.S. degrees in agricultural economics and agribusiness, a Master of Agribusiness (MAB) degree, and a Ph.D. in economics with a specialization in agricultural economics. Currently, over 400 undergraduate and 120 graduate students are enrolled in our programs.

Areas of research emphasis may include, but are not limited to, production agriculture, agricultural marketing, agribusiness, resource economics, climate change, energy, risk management, trade, and development. The Department is known for a research program that addresses real-world problems in local and global agriculture and agribusiness. More information on the Department can be found at www.ageconomics.ksu.edu.

Closing Date: Review of applications will begin on August 15, 2013 and continue until the position is filled. Incomplete applications will not be reviewed.

Equal Employment Opportunity: Kansas State University is an Affirmative Action/Equal Opportunity employer committed to nondiscrimination on the basis of race, sex, national origin, disability, religion, age, sexual orientation, or other non-merit reasons (including employment of disabled veterans and veterans of the U.S. Military).

Click here to read the full position description.

Introducing the K-State Agricultural Lender Survey: A new look at agricultural lending conditions

June 6, 2013 – With today’s volatile commodity market and questions surrounding the quality of credit for various agricultural sectors, information about the current and future state of agricultural financial conditions is in high demand by those interested in and following agriculture.

However, information about these evolving conditions is somewhat limited, especially on the short- and long-term outlook. To track and forecast these credit condition developments, agricultural economists at Kansas State University have created the K-State Agricultural Lender Survey.

“A recurring question asked by farmers is, ‘what does the future hold for agricultural credit conditions?’” said Allen Featherstone, professor of agricultural economics and program director of the Master in Agribusiness degree at Kansas State University. “We set out to find answers to this and other questions for the agricultural lending industry, by working with our industry partners and other colleagues at K-State to conduct this survey.”

The purpose of the K-State Agricultural Lender Survey is to not only answer questions about the evolution of agricultural credit conditions, but also to provide a broader overview of all agricultural lenders. While information about agricultural financial conditions does exist, most of it is from the commercial bankers’ viewpoint and limited information is available on expectations or forecasts of the short- and long-term evolution of credit conditions. Ultimately, the survey should help producers, agribusinesses and lenders make more informed and sound financial decisions.

While the March 2013 survey results provide many insights into agricultural credit trends, one really stands out – competition for agricultural loans is rising. One respondent went as far as to say, “Competition is fierce for agricultural loans.”

This is especially relevant because the survey respondents stated that farm loan volumes rose and are expected to rise in the short-term. In addition, large lending institutions, those with more than $50 million in agricultural loans, reported the largest gain in farm loan volumes, with the expectation for further increases in the near-term.

For more information about the outlook for agricultural credit conditions, go to the K-State Agricultural Lender Survey.

This survey was developed by K-State’s Department of Agricultural Economics’ Brady Brewer, doctoral candidate; Brian Briggeman, associate professor and director of the Arthur Capper Cooperative Center; Allen Featherstone; and Christine Wilson, professor and assistant dean, Academic Programs, for the College of Agriculture.

Story by: Amanda Erichsen, aerichsen@k-state.edu

For more information, contact Allen Featherstone at afeather@ksu.edu.

http://www.ksre.ksu.edu/news/story/lender_survey060613.aspx

K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.