Weekly update from AgManager.info

In case you missed the latest AgManager.info update, here are some of the highlights!

2014 KFMA Farm Income Enterprise Reports
May 26, 2015 – The 2014 KFMA Farm Income Enterprise reports are out and Kevin Herbel and his KFMA associates provide income enterprise reports to your table.

This week on the Livestock Outlook Radio Program
May 26, 2015 – Derrel Peel of Oklahoma State University provides analysis of the cattle market, and reviews the latest USDA cattle-on-feed report.

Crop Basis Maps
May 28, 2015 – GIS maps show this week’s basis and deviation from 3 year average for corn, wheat, soybeans, and milo in the central plains.

Grain Outlook Radio Program:
May 29, 2015 – Dan O’Brien comments on why the grain markets haven’t reacted much to the ongoing wet weather in central and the southern plains as part of his weekly update.

Other highlights include
May 29, 2015 – Feature profile from Kansas Farm Management Association Administrator Kevin Herbel.  Herbel’s focus is helping farmers manage resources efficiently.  Herbel received his B.S. degree and Master’s from Kansas State University’s Agricultural Economics program.

K-State Spring 2015 Survey Indicates Lower Farmland Prices

Agricultural lenders are reporting decreased farmland values and increases in non-performing farm loans. According to the results of an Agricultural Lender Survey conducted by the Kansas State University Department of Agricultural Economics in March, this is a continuation of a trend witnessed in the end-of-year survey conducted in 2014.

Allen Featherstone July 2014“For the first time since we began this survey, the majority of respondents thought land values declined,” said Allen Featherstone, professor and department head of the K-State Department of Agricultural Economics. Additionally, he mentioned that the long-term expectation also pointed to declines in land values.

Researchers pointed to uncertainty in the markets regarding interest rates and competition amongst the lenders as some of the long-term factors in the results, which still showed a strong credit market for producers. Lenders cited lower commodity prices, rising operating costs and the softening of cash rents. Combining these with a decrease in farmland prices created concern in the long-term financial health of the farming sector.

However, in reference to the increase in non-performing loans, Featherstone said he believes the market is just cycling back to a normal state. The study indicated a stronger market of loan availability in the agricultural market, which would benefit producers in the future. Research shows that bankers are still interested in agricultural investments, but experts say the farmers are going to have to show a strong investment plan.

“Producers are going to encounter cautious lenders,” Featherstone said. “Farmers will have to be well-prepared and document plans going forward to continue to access credit at good rates.”

The Agricultural Lender Survey included 39 lending institution responses. Lenders in the survey considered five key areas: farm loan interest rates, spread over cost of funds, farm loan volumes, non-performing loan volumes and agricultural land values.

Various K-State Department of Agricultural Economics researchers developed and conducted the survey, including Brady Brewer, recent doctoral graduate; Brian Briggeman, associate professor and director of the Arthur Capper Cooperative Center; Allen Featherstone; and Christine Wilson, professor.

For more information about the outlook for agricultural credit conditions and commentary on areas of concern within agriculture, go to the K-State Agricultural Lender Survey http://www.ageconomics.k-state.edu/research/ag-lender-survey/index.html.


This news release from K-State Research and Extension is posted at http://www.ksre.ksu.edu/news/story/farmland_prices060415.aspx.

For more information:
Allen Featherstone – afeather@ksu.edu or 785-532-4441

www.ageconomics.k-state.edu


Kansas net farm income slipped further in 2014

Lower crop prices weighed on farmers’ bottom line

Lower prices paid to farmers for their crops in 2014 pulled average net farm income in Kansas below previous year levels and well below the five-year average, according to the Kansas Farm Management Association.

Net farm income across 1,175 KFMA member farms averaged $122,190, down from $140,356 the previous year and below the five-year average of $149,114, KFMA’s annual PROFITLINK Analysis showed. An executive summary of the report is available online at http://www.agmanager.info/kfma/.

“Average net farm income for the state was down about $18,000 in 2014 compared with 2013,” said Kevin Herbel, KFMA program administrator, adding that most of the pressure came from lower crop prices.

kfma_Feb14map_KSKFMA divides the state into six regions. Net income last year was down in four of the six regions while southeast Kansas and northwest Kansas farms had higher income than the previous year.  South central Kansas farms had the lowest at $52,996, a sharp drop from $151,464 a year earlier. Southeast Kansas farms had the highest net income last year at $183,899.

Not all Kansas farms are KFMA members, but the annual report is a barometer of financial conditions for producers, especially when comparing one year to the next, Herbel said.

While crop prices were down in 2014, livestock prices were higher, which aided producers who raise cattle, particularly.

One state, different regions

“Historically, whatever the wheat crop does, that’s how the KFMA numbers move,” said Bryan Manny, KFMA economist in south central Kansas, where the average farm income was the lowest. “Last year the average wheat yield (in south central) was about 26 bushels per acre, whereas in 2013, the average yield was 47 bushels per acre. Last year’s yield was the lowest since 2007 when there was a late freeze and the average yield was 14.6 bushels per acre.”KFMA_4-17-2014

Despite the slide, most producers are weathering the storm well, Manny said of farmers in his area. Over the last few years, some producers have shifted some of their acres to crops other than wheat and the rains in June and July last year helped those spring-planted crops.

“Farmers are also not spending a lot on equipment right now,” he added.

Average net farm income in northeast Kansas last year tallied $149,476, not much change from the previous year of $160,350, said Clay Simons, a KFMA economist in that area.

“Primarily, producers had tremendous yields in the face of lower prices which helped,” Simons said, adding that some cattle producers in northeast Kansas received Livestock Forage Disaster payments (http://www.fsa.usda.gov/Internet/FSA_File/lfp_2014_fbill.pdf) because of drought conditions. Those payments, along with historically high cattle prices provided a boost last year.

“The average (cattle) farm in northeast Kansas received $29,010 in forage loss payments,” Simons said. “That was a nice economic shot in the arm for them.”

Despite the relatively strong net farm income last year in northeast Kansas, however, producers know things can change and are being cautious, he said.

“Corn with a $3 (price) in front of it is certainly different than with a $6 or $7 in front of it,” he added, noting that fertilizer and other input prices, as well as rent and land prices, have not dropped in tandem with crop prices.

The average price paid to U.S. farmers for their corn in the 2013-2014 marketing year was $4.46 per bushel, down from $6.89 the previous year. USDA projects the 2014-2015 average price to dip even further, to $3.55 to $3.75 per bushel.

“We (northeast Kansas) had a nice buffer with yields and livestock prices last year but we can’t count on that forever,” Simons said, adding that most producers have been prudent with their finances and that balance sheets are generally in good shape.

Dave Rempe, KFMA economist in north central Kansas said that area did not have a great wheat crop in 2014, where average net farm income slipped to $102,508 from $137,633 the previous year. “That, along with feedgrain commodity prices were the reasons we were down. We would have been down more if not for the livestock prices. Fortunately that helped our income.”

Despite lower income in 2014, $102,508 was a good year considering the size farms in that part of the state, Rempe said.

“Our farms are in really good shape to weather this storm financially,” he said. “We’ve seen this coming. People are cautious. A lot of economic activity, such as equipment purchases, has slowed as people are anticipating a drop in income. There’s a chance we’ll see deterioration of our balance sheets, but we’re going into it in a very strong position.”

Net income by operation

The KFMA member data for 2014 also showed:

  • The value of production across Kansas farms came in at an average of $613,243, down from both $631,437 a year earlier and $639,282 two years earlier. The 2014 number was, however, above the five-year average of $606,792.
  • Net income for dryland crop producers averaged $91,811, down from $161,069 in 2013.
  • Net income for producers who irrigate averaged $118,608, down from $125,628 in 2013.
  • Average net income for 36 producers whose operations are primarily cow herds jumped to $177,047 from $92,612 a year earlier.
  • Net income for producers who grow crops and have a cow herd averaged $155,677 compared with $73,005 the previous year.
  • Net income for the 19 KFMA member producers who grow crops and background calves averaged $321,206, sharply higher than a year earlier at $71,719.

For more information:

Kevin Herbel, KFMA program administrator – 785-532-8706 or kherbel@ksu.edu


Story by: Mary Lou Peter, mlpeter@ksu.edu

K-State Research and Extension, http://www.ksre.ksu.edu/


 

K-State Alumni Association honors two agricultural economics graduates

Youwei Yang

Youwei Yang

Students who demonstrate strong leadership were nominated by professors to be honored at the International Graduation Celebration on May 1 for outstanding international leadership, and on May 5 at the Multicultural Graduation Celebration for excellence in multicultural leadership.
Youwei Yang (pictured left), Baiyin City, China, earned the inaugural International Leadership Award. Yang was one of four students to receive this award at the International Graduate Celebration. During his time at K-State, Yang has been a student ambassador for K-State Libraries, as well as the Student Governing Association International Affairs Director. Winners of this award not only demonstrate strong leadership but also excellence in academic achievements.

Justine Floyd

Justine Floyd

Justine Floyd (pictured right), Wichita, received the Multicultural Leadership Award. Floyd was one of four graduates to receive this award for outstanding achievement and leadership during her time here at K-State. Floyd served as the Head Delegate for the Black Student Union, and as a member of the Minorities in Agriculture, Natural Resources and Related Science.
The Alumni Association honored a total of eight K-State graduates for excellence in leadership and achievement within multicultural and international organizations and communities during their time as a student.

Read more about the K-State Alumni Association Multicultural and International awards.


Original article by Tim Schrag, Kansas State University

Harner and Kays selected for Blue Key leadership

Garret Kays

Garrett Kays

The Kansas State University chapter of Blue Key, a senior honorary, selected new members and appointed new positions Tuesday, May 26, 2015.

Elizabeth Harner, senior in agribusiness from St. George, is the new director of banquet and recognition. Garrett Kays, senior in agricultural economics from Weir, is the new President of K-State’s Blue Key chapter.

Blue Key honors students for excellence in service, scholarship and leadership. Two agricultural economics students were elected for new officer positions.

Elizabeth harner

Elizabeth Harner

Students elected for officer positions within Blue Key are expected to hold two leadership positions in an organization.

Organizations can be either student-run or community involvement opportunities. In addition to leadership experience, students are required to maintain a 3.0 grade point average to be eligible for membership.

Read more about Blue Key’s leadership.


Article by Kansas State University

Blue Key Recognizes Jason Troendle for leadership, service

20131104_jason_troendle_0004-(ZF-1159-47195-1-002)

Jason Troendle

On April 12, Blue Key, K-State’s senior honor society, recognized outgoing seniors for outstanding leadership.

Jason Troendle, St. Charles, Minnesota, received the William L. Muir II and John T. Muir Alpha Tau Omega Blue Key Scholarship for excellence in scholarship, service, and leadership.

The Muir scholarship honors two past Blue Key members and brothers, John Muir and William Muir. A committee comprised of the dean of students, Blue Key advisers, a member of the Muir family, and an officer from K-State’s Alpha Tau Omega Student’s’ Aid Endowment Fund. Both Troendle and Jordan Marquess, senior in biology and pre-medicine, received plaques and a $1000 scholarship for their leadership roles both at K-State and off campus.

Troendle demonstrated strong service and leadership throughout his time at K-State. jasonTroendle was the personal and professional development chair for Blue Key, a student fellow at the Center for Risk Management and Education and Research, as well as the public relations chair and the strengths advocate public relations chair for the All-University Open House.

Outside of K-State Troendle interned for Cargill Feed and Nutrition and the Kansas Department of Agriculture. He also served as the national secretary of the National FFA Organization.

Read more about Blue Key’s outgoing scholarship winners


Article by K-State Communications and Marketing

Blue Key awards scholarships to two agricultural economics students

JefferyHadachek-BKSchol-2015

The Kansas State University chapter of Blue Key, a senior honors society, recognized students for excellence in leadership, scholarship, and service. Two agricultural economics students displayed this great potential in their university and community contributions.

Jeffery Hadachek, sophomore in agricultural economics, received the Robert Lewis Sophomore Leadership Award. Hadachek was one of three students to receive an award for outstanding leadership. Winners of this award display great potential for future leadership roles and service to the university.

Youwei Yang

Youwei Yang

Youwei Yang, senior in agricultural economics, received the Chester E. Peters Student Development Award. The winners of the Chester E Peters scholarship have demonstrated high quality of leadership, service and moral integrity, as well as encouraged and supported fellow students at the university.

K-State’s chapter awards more than $20,000 in scholarships each year to honor student excellence in service, scholarship and leadership.

Read more about the Blue Key scholarships winners.


Article by Darrah Tinkler, Kansas State University

Abigail Friesen earns honorable mention for Kirmser Undergraduate Research

kirmser (1)

Abigail Friesen, freshman in agricultural economics, received honorable mention for her essay: “Informative report: Immigration and job opportunities” at the Kirmser Award ceremony on May 13. Friesen wrote the essay for her expository writing class, under the instruction of Erica Ruscio, Master’s student in English.

The Kirmser Undergraduate Research Awards recognize the work of undergraduate student scholarship. The award is presented by K-State Libraries and possible through a gift made by Philip and Jeune Kirmser. Sandy Chastan, the Kirmser’s daughter, made an appearance at the ceremony.

Kirmser Awards are divided into three categories and awarded to students engaging in academic research and inquiry. The three categories for research awards are: group work, individual freshman projects, and non-freshman individual projects.
Eighteen students won awards or received mention at the Kirmser Undergraduate
Research Award Ceremony.

Read more about Kirmser Undergraduate Research Award honors.


Article and picture provided by K-State Media Services.

Study: Spring heat more damaging to wheat than fall freeze

Scientists need to develop new heat-resistant wheat varieties.

A team of researchers including a Kansas State University professor has released results of a study that measures the effects of climate change on wheat yields, findings that may have implications for future wheat breeding efforts worldwide.

Andrew BarkleyAgricultural economist Andrew Barkley, who has studied wheat for nearly 30 years, said that the team’s major finding is that heat appears to be more damaging to wheat yields than freezing temperatures.

“There’s a lot of evidence to suggest that temperatures will increase in the future,” Barkley said. “What we’ve done here is estimate the impact of what might happen to wheat yields if temperatures increase in Kansas.”

In Kansas, the country’s most productive wheat-growing state, farmers plant winter wheat in the fall and harvest it in late spring and early summer. The nine-month growing season makes the crop susceptible to many temperature swings.

If temperatures continue to rise, as climate patterns currently suggest, wheat yields may be damaged in the spring when flowering and grain filling occur.

“In Kansas, wheat is extremely important economically; crops are worth up to $3 billion per year just in Kansas, and we produce about 15 percent of the wheat that is grown in the U.S.,” Barkley said. “So we’re interested in wheat for several reasons, but with climate change, we’re concerned about the potential impact of that on wheat in the future.”

Barkley added that more recently released varieties of wheat – which are normally higher yielding – are less heat resistant than older varieties. For farmers, it could force a decision about using those pest- or disease-resistant varieties and accepting the risk of losing yield to high spring temperatures.

“Our research points to developing genetic strategies to identify the exact genes and DNA that will help us change the wheat plant so that it can accommodate for heat,” Barkley said. “At this time, the [Kansas State] agronomy department is working on that exact thing.”

From 1985 to 2013, breakthroughs in wheat breeding helped Kansas farmers improve their yields by 27 percent, according to Barkley. “We’ve had huge success in increasing the amount of food we get from each acre in Kansas,” he said.

Knowing that rising temperatures threaten that success, though, is “good news, in a way,” Barkley noted.wht4

“As we progress, we are going to be able to deal with these changes in temperature as they arise. Climate change is a slow process, and wheat breeding also is relatively slow, but there’s been major advances in wheat breeding, so that we can change the average time it takes to develop a new variety from over 10 years to about half that time. We really have a positive forecast of changing these wheat varieties to accommodate for the heat.”

The study is published in the May 11 Proceedings of the National Academy of Sciences (www.pnas.org). Other researchers on the team include Jesse Tack of Mississippi State University and Lawton Lanier Nalley of the University of Arkansas.


Written by: Pat Melgares, K-State Research and Extension, melgares@ksu.edu, 785-532-1160

For more information: Andrew Barkley, barkley@ksu.edu or 785-477-1174

 

Report from Tonsor and Schroeder finds mandatory COOL causes meat industry, consumer losses

Based on a study commissioned by the USDA, economists report that compliance leads to billions in net economic costs

Any policy that results in higher costs of compliance without a quantifiable benefit will likely have an adverse economic impact, and recent research shows mandatory country-of-origin labeling, or MCOOL, is one such policy.

The U.S. Department of Agriculture (USDA) assigned the research, based on a requirement in the 2014 Farm Bill to quantify the market impacts of MCOOL. The requirement included studying both the implementation of MCOOL in 2009 and a revision of the policy in 2013.

Agricultural economists Glynn Tonsor and Ted Schroeder from Kansas State University and Joe Parcell from the University of Missouri completed the research and issued the full report (http://www.agri-pulse.com/Uploaded/USDACOOLEconomicReport.pdf) to government officials May 1.

The researchers found no evidence of meat demand increases for MCOOL covered products—those products sold at retail locations such as supermarkets. Because general meat demand has not increased, and the meat industry as a whole has experienced lower quantities and higher costs to implement the additional labeling procedures, MCOOL has led to net economic losses.

Industry stakeholders and consumers negatively impacted

Tonsor said the research involved compiling literature from MCOOL studies and other non-peered reviewed information such as comments regarding cost impacts. The researchers used economic models to quantify price and meat quantity estimates over the next 10 years based on the 2009 and 2013 rulings. They compared those findings to 2008, which provided estimates if MCOOL had never occurred.

“We estimated the beef industry’s 2009 impact was an economic loss of $8.07 billion over 10 years,” Tonsor said. “For the pork industry, it’s a $1.31 billion loss.”

labelTonsor pointed out that approximately 16 percent of pork and about one-third of beef production is covered by MCOOL, as some products such as those sold in restaurants are not required to bear the label. MCOOL covered beef would have to see at least a 6.8 percent increase and covered pork a 5.6 percent increase in demand to avoid an adverse economic impact.

Results also showed consumers to experience net losses—$5.98 billion for beef and $1.79 billion for pork—over 10 years due to higher retail prices and lower retail quantities available every year.

The researchers had to study 2013 separately because the MCOOL policy changed. The 2009 ruling led to labels such as “Product of U.S. and Canada” showing up on a package of beef, for example. The 2013 ruling required that same package to read more specifically, “Born in Canada, Raised and Slaughtered in the U.S.”

“We added the specificity of ‘Born, Raised and Slaughtered’ stages in 2013, which means additional costs with additional precision,” Tonsor said. “But, it’s not the same level of costs as we had the first round in 2009. There’s an incremental additional cost, but it isn’t as large as the original cost to be in compliance.”

The additional impact of the 2013 rule was another $494 million loss to the beef industry and $403 million loss to the pork industry over 10 years. Demand increases would need to be at least another 0.4 percent for beef and 1.6 percent for pork on top of the 2009 estimates to avoid an adverse economic impact.

Consumer losses were another $378 million for beef and $428 million for pork based on the 2013 revision.

The poultry industry, he said, was the only one to show a gain. Those gains for 10 years were $753 million for 2009 and an incremental addition of $67 million for 2013. The gains, however, were narrow compared to the billions in losses to the beef and pork sectors that mean a total loss for the meat industry as a whole.

“The main reason is (the poultry sector) doesn’t have the same cost of compliance, so at the retail level there is some shift away from more expensive beef and pork prices over to poultry products,” Tonsor said. “That serves as a pull for more production on the poultry side, and the poultry industry benefits.”

What the future has in store

The World Trade Organization is expected to make an announcement later this month about the future of MCOOL. Some groups and political leaders believe the USDA should repeal MCOOL, while others advocate that the United States has the right to label origin on foods sold in the country.

Tonsor said another approach is to make the policy voluntary.

“Our report and the literature synthesis in it points to a voluntary approach being better,” he said. “Watching this situation, I agree that voluntary labeling would be an improvement from where we are now. It’s hard for me to say if politically that is where we will be a year from now or three years from now.”

To access the full report, visit http://www.agri-pulse.com/Uploaded/USDACOOLEconomicReport.pdf. A video interview with Tonsor is available on the K-State Research and Extension YouTube page (https://www.youtube.com/watch?v=OvXMoJk5o4o&feature=youtu.be).


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

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

This news release from K-State Research and Extension is posted at http://www.ksre.ksu.edu/news/story/mandatory_COOL050615.aspx.

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