Risk and Profit Conference
See 2018 presentations HERE.
Markets and Government: Trade, Taxes and Transition
An annual conference hosted by the Department of Agricultural Economics that provides an opportunity for key agricultural decision makers to interact with each other and with faculty on important topics in agriculture.
Questions? Rich Llewelyn at firstname.lastname@example.org or 785.532.1504.
August 22 - 23, 2019
K-State Alumni Center
100 Alumni Center 1720 Anderson AveManhattan , KS
Click HERE for BREAKOUT SCHEDULE
THURSDAY, AUGUST 16, 2018
10:30 am REGISTRATION
11:30 am – 12:15 pm LUNCH
12:15 pm – 1:30 pm GENERAL SESSION
Trade Policy Changes:
Risks and Opportunities for Agriculture
Dr. Richard Crowder, Virginia Tech University
1:40 pm – 2:30 pm BREAKOUT SESSION I
2:40 pm – 3:30 pm BREAKOUT SESSION II
3:40 pm – 4:30 pm BREAKOUT SESSION III
4:40 pm – 5:30 pm BREAKOUT SESSION IV
5:30 pm – 6:15 pm Social & Cash Bar
6:15 pm – 7:00 pm PRIME-RIB DINNER
7:00 pm – 8:15 pm GENERAL SESSION
A Conversation With a Kansas Producer
Bob Haselwood, Haselwood Farm Inc.
FRIDAY, AUGUST 17, 2018
7:45 am – 8:15 am ROLLS and JUICE
8:15 am – 9:15 am GENERAL SESSION
Grain Market Situation and Outlook
Dan O’Brien, Kansas State University
9:30 am – 10:20 am BREAKOUT SESSION V
10:30 am – 11:20 am BREAKOUT SESSION VI
11:30 am – 12:20 pm BREAKOUT SESSION VII
12:45 pm – 1:30 pm LUNCH
1:30 pm – 2:30 pm GENERAL SESSION
Livestock Market Outlook
Glynn Tonsor, Kansas State University
2:30 pm – 2:45 pm FINAL QUESTIONS and WRAP-UP
Ambassador Richard T. Crowder has a 50-year career of service to domestic and global agriculture through private, public and academic employment. He is currently serving as Thornhill Professor of Agricultural Trade in the Department of Agricultural and Applied Economics at Virginia Tech.
From January 2006 until May 2007 he served as the U.S. Chief Agriculture Negotiator where he was responsible for directing all U.S. agriculture negotiations worldwide including multilateral negotiations in the WTO as well as regional and bilateral negotiations. He served as a senior advisor to the United States Trade Representative from May 2007 until April 2008.
Before joining the U.S. Trade Representative office, he served as CEO of the American Seed Trade Association. His 30 plus years of domestic and international private sector experience includes senior management positions in a number of companies throughout the food industry including The Pillsbury Company, Armour-Swift Eckridge, DEKALB Genetics and Wilson & Co.
He served as Under Secretary International Affairs and Commodity Programs for the United States Department of Agriculture from 1989-1992. In this role he was responsible for all USDA agencies dealing with international trade and development as well as domestic farm programs. He led the agriculture negotiations for the United States in the Uruguay Round and managed the 1990 Farm Bill process.
In January 2013, the American Farm Bureau Federation presented its highest honor, the Distinguished Service Award, to Ambassador Crowder at its annual meeting in Nashville, TN. He also received the USTR Distinguished Service Award for his service as Chief Agriculture Negotiator.
Ambassador Crowder earned B.S. and M.S. degrees from Virginia Tech and a PhD from Oklahoma State University in Agricultural Economics.
Bob Haselwood is the featured producer for the "Conversation with a Kansas Farmer" on Thursday night. Bob is a soybean, corn, and wheat producer in Shawnee county, just south of the Topeka city limits. He is currently farming 1,850 no-till acres. He has been 100% no-till since 1999.
Bob has been active in the Shawnee County Farm Bureau, the Kansas Farm Bureau, the Kansas Soybean Commission, and the United Soybean Board.
1. Update on the Tax Cuts and Jobs Act–Parts 1 and 2 (2 hours) - Roger McEowen and Mark Dikeman
This session will detail the TCJA changes as they impact farmers, ranchers and agricultural cooperatives and their patrons. In particular, the session will address the application of the new qualified business income deduction; changes with respect to like-kind exchanges; new depreciation rules and related planning implications; rate bracket planning; commodity gifting; family and individual tax credits; remaining Schedule A deductions; flushing out the myths vs. truths (property tax; interest expense; cooperative sales, etc.); charitable gift planning; changes with respect to personal casualty and theft losses; new tax rules associated with alimony; alternative minimum tax; handling moving expenses; loss limitation rules for non-corporate taxpayers; handling business interest; cash accounting rule changes; new rules surrounding business-provided meals; handling partnership losses; immediate expensing of assets; modified education-related provisions; and changes concerning retirement-related provisions. Numerous examples will be presented and discussed.
2. Kansas Farm Finance Issues - Allen Featherstone and Robin Reid
3. Introduction to Farm Payroll - Anthony Ruiz and Mark Dikeman
Advances in machinery, technology, and methodology have allowed agricultural producers to gain tremendous efficiency advantages and allowed farm labor requirements to significantly decrease in recent decades. Yet many farms require one or more employees to perform tasks and make decisions imperative to successful operation. This talk focuses on basic Kansas and Federal payroll and tax regulations as well as things to consider before work begins, handling withholding, calculating paychecks, benefits, and tools to make the process smoother.
4. Family Living Expenses, Current Net Farm Income, and Effects on Farm Equity - Gregg Ibendahl
Current net farm income is low from a historical perspective but especially compared to four or five years ago. At the same time, family living increased during the period of record farm income and has been slow to adjust. The result of lower than normal farm income and higher than normal family living is that farms may be using up some of their equity. This session examines those KFMA farms with family living expenses to see how the combination of net farm income, family living expenses, and off-farm income has affected overall farm equity of specific farm groups in the state. The various farm expense categories will be examined to see where farmers might be able to make adjustments if needed.
5. Factors Affecting Net Farm Income - Emily Carls, Terry Griffin, Gregg Ibendahl
Recent trends in net farm income have increased the caution that producers exhibit when trying to make management decisions. Low commodity prices necessitate efficiency in other areas of production such as machinery, inputs costs, etc. Extension personnel have been working to assist in improving profitability by providing producers with the latest research, guidance for farm decisions, and the software/tools to aid in decision making. However, without fully understanding which variables affect net farm income, whole-farm management decision making can be challenging. With better knowledge of these factors, extension personnel could make better recommendations for farmers to improve overall profitability. The purpose of this analysis is to determine the factors that predict net farm income in order to help producers find areas where they can make feasible adjustments to their operations and increase their profitability.
6. Preparing Your Finances For Disaster - Sandra Myers
Everyone knows how to prepare your house, farm, or family for when disaster strikes. But what about your finances? Is your financial emergency kit prepared for a tornado, flood, fire or death? This session will help you decide how much you need to survive emergencies, avoid insurance snags, and figure out what you need to have at a moment’s notice when those disasters hit.
7. The Value of Social Capital in Farmland Leasing Relationships - Allison Pitts and Mykel Taylor
We will discuss the latest research on how landowners and tenants approach land leasing in Kansas. Results of a recent survey asking both sides of the lease agreement will be presented and discussion will follow on how the survey results can be implemented to achieve a more effective leasing relationship.
8. How Much Do Landlords Benefit From Agricultural Subsidies Versus Tenants? - Nathan Hendricks
Government subsidies are paid to tenants when land is rented under a cash rental agreement. However, landowners may still capture the benefits of subsidies if they adjust the rental rate. This session discusses new research that estimates how much direct payment subsidies were reflected in cash rental rates. We exploit the fact that direct payments were much higher in the Southern U.S. due to historical political favoritism of southern commodities. We compare cash rental rates from counties in the South with much larger direct payments to those in other regions that have similar expected market returns. The implications for who benefits from current Farm Bill programs will be discussed. .
9. Update on the Farm Bill - Mykel Taylor and Art Barnaby
We will be discussing the current status of the farm bill and what its contents may mean for Kansas farmers. We will also review the programs outcomes from the last farm bill as a way of projecting forward the sign-up decisions producers are likely to make.
10. Finding Successful 2018-2019 Grain Marketing Strategies - Dan O'Brien
Developing and carrying out a successful grain marketing program during Fall 2018 through Summer 2019 will depend on how a farmer chooses to manage the opportunities and risks that will present themselves in the grain markets. This session will focus on the possibilities and pitfalls that are likely to happen in grain markets on a "seasonal" basis in the coming year, and how best anticipate managing them in terms of marketing strategies. These discussions of anticipated seasonal "opportunities and risks" for the Fall 2018 – Summer 2019 period will be supported with analysis of the range or "probability distribution" of grain futures and cash price trends and tendencies that have occurred since 2005 for Kansas corn, wheat, grain sorghum and soybeans.
The profitability of historic seasonal grain pricing opportunities relative to annual cost of production for major crops in Kansas will be examined. Cost of production estimates are based on Kansas Farm Management Association cost of production figures. The effectiveness of using of grain futures will be examined from the perspective of the profitability of pricing opportunities they presented through time within a marketing year. Pre-harvest futures options-based strategies will be examined from the perspective of what could have implicitly been paid for puts and calls relative to final closing levels of their respective harvest futures contracts.
11. Principles of Hedging Livestock Sales Using Futures Markets - Brian Coffey
This session will include a review of how to use futures and options positions to manage price risk in the cash market for livestock. Emphasis will be given to how a futures or options position changes a producer’s risk exposure and livestock basis. Several practical examples of basic futures/options strategies will be presented with time given at the end for questions and discussion.
12. High Frequency Trading in Agricultural Futures Markets: What Low Frequency Traders Need to Know - Joe Janzen
High frequency traders (HFTs) are new participants in the futures markets we rely upon to discover the prices of major agricultural commodities. This presentation describes what they are and why they trade corn, wheat, and cattle. Along the way, we will answer some common questions about HFTs, such as: If a farmer hedges with a futures contract, how likely is it that an HFT takes the other side of the trade? Do HFTs manipulate prices or make prices more volatile, and if so, how do they do it? What are the rules governing high frequency trading? Ultimately, how much confidence should producers, merchants, and end-users have in the futures markets?
13. Risk Management in Evolving Live Cattle Markets - Ted Schroeder, Glynn Tonsor, and Brian Coffey
The US live cattle cash market has experienced a substantial structural shift toward non-negotiated trade in recent years leading to sporadic trade across market regions. At times, US regions appear to be segmented markets. Meanwhile, the cattle market has realized immense price volatility making judicious price risk management by producers essential. However, hedging risk has also increased. This session will outline the nature of changes in live cattle cash markets over the past two decades and discuss how these changes have influenced ability to use futures markets to manage price risk.
14. Cow-Calf Profitability-Where to Focus Management For Success - Whitney Bowman, Dustin Pendell and Kevin Herbel
Cow-calf production profitability varies greatly from year to year, such as the record high returns to cow-calf producers in 2014 followed by record low returns the following year. While some variability of returns is inherent to the industry, many cow-calf producers are able to turn a profit even in “hard” years. In this case, good management could be defined as persistently being more profitable than one’s neighbors over time. Certain factors that affect profitability may be more easily managed by cow-calf producers than others. By understanding the factors that both improve profitability and can be persistently managed by Kansas cow-calf producers, producers may be able to better allocate resources to improve returns.
15. Impact of Climate Change and Geographic Movement of Cattle Production - Buddhika Patalee and Glynn Tonsor
Cattle production is one of the biggest industries in the US and ranks 1st in cash receipts. Weather plays a key role in feedlot performance in terms of daily weight gain and profits, hence deviations from normal weather conditions make cattle production better or worse. Over the past few years, cattle inventory numbers have been shifting regionally. According to USDA-NASS statistics, 26% in 2007 and 73% in 2013 of the total cattle inventory is from areas experiencing drought. During the southern plains’ drought in 2011, livestock producers moved north, resulting in a 5-8% increase in livestock inventory in Colorado, Iowa, Nebraska, and Wyoming, with a 13-15% decrease in inventory in New Mexico, Oklahoma, and Texas. The objective of this study is to investigate the impact of climate change on cattle production and how it affects cattle share in top cattle-producing states; Texas, Kansas, Nebraska, Colorado, and Iowa.
16. Attitudes Toward Groundwater Use in the Ogallala Aquifer - Bill Golden, Matt Sanderson, and Bridget Guerrero
The Ogallala Aquifer has declined in some areas more than 60% since predevelopment. Past efforts to slow the decline and ensure the future economic viability of the region have been largely unsuccessful. More recently, interest in groundwater conservation has accelerated in some areas, with a variety of management strategies to sustain the aquifer. The purpose of this presentation is to review some early results from an aquifer-wide survey of attitudes in the region.
17. Can Adjustment of Planting Dates Offset Warming Impacts for Kansas Sorghum Producers? – Noah Miller and Jesse Tack
Changes in future weather have been predicted to significantly reduce future U.S. corn yields. A potential way to address yield losses in corn is to switch from corn to sorghum production, as sorghum is known for its capacity to withstand higher temperatures than corn. However, the effects of extreme heat on sorghum yields are still relatively under-researched. In this session we examine the effects of warming temperatures on sorghum yield losses, and the ability to offset these losses by adjusting the planting date.
18. Does Crop Insurance Enrollment Exacerbate the Negative Effects of Extreme Heat? A Farm-level Analysis - Madhav Regmi, Jesse Tack
This paper investigates the impact of government-sponsored crop insurance programs on farms’ financial stress and production risk of farms facing extreme heat stress. The findings on production risk suggest that insured corn is more sensitive to extreme heat than uninsured corn; however, insured wheat is as sensitive to extreme heat as the uninsured wheat. Thus, if moral hazard were the cause of the observed productivity divergence, it would seem to be a concern for some – but not all – crops. The results also demonstrate that crop insurance has reduced the financial stress of Kansas farm households. In particular, this research suggests that crop insurance might mitigate financial stress, but it also likely exacerbates production risk under extreme heat in the U.S. heartland.
19. Impact of VSR on HRW Wheat Futures in Year 1: What Do You Mean I Can’t Deliver Wheat Against My Futures?
Dan O’Brien, Darrell Holaday, Art Barnaby, Beth Yeager
A Variable Storage Rate (VSR) mechanism was adopted for the CME Kansas Hard Red Winter Wheat futures in 2018, beginning with the MAY 2018 contract. This session will begin with a look at the track record of the VSR on MAY 2018, JULY 2018, and SEPT 2018 HRW Wheat futures to date. The patterns and behavior of HRW Wheat futures price levels and deferred contract spreads will be examined, along with changes in volume and open interest for lead versus deferred contracts. The identified purpose of the VSR was/is to bring about convergence between HRW Wheat futures and cash prices at designated CME Wheat delivery locations during futures contract delivery periods. To this end, HRW wheat basis levels at key HRW wheat futures designated deliver locations will be examined as well. However, the short crop - high protein situation for HRW Wheat in 2018 has complicated the determination of the impact of VSR in year 1 of its adoption. During the later part of this session there will be a discussion about the function, effectiveness, and impact of the VSR on HRW Wheat futures and cash prices. The discussant is an established professional market analyst-advisor who has worked with farmer clientele and has been periodically involved in a grain futures industry advisory capacity on grain futures contract performance issues. These "in the market" observations will lead into a concluding "open floor" discussion about the VSR and its impact on CME HRW Wheat futures and HRW cash markets.
20. Eliminating HPO Will Leave a Donut Hole in Farmers’ Coverage - Art Barnaby
Nationally, Revenue Protection (RP) insures 93% of the insured soybean acres and 94% of Kansas insured acres. About 73% of all insured Kansas soybeans are insured with RP coverage at 75% or less. Nationally, it is nearly an even split. About 46% of all USA insured soybeans are covered with RP at 75% or less, while 80% or greater RP covers 47% of all acres. Some experts have suggested farmers don’t need to manage price risk because they have a minimum price of $10.16 in their RP coverage. That is true before the deductible is applied to both their price and yield guarantees. A 75% RP insured soybean farmer in 2018 will need a price below $7.62 with an average crop yield to trigger any soybean indemnity payments. Because average yields are the most likely outcome, the effective strike price for a typical Kansas soybean grower is not $10.16, but $7.62, less premium. Art will show how to split the revenue claim between yield loss and price loss. This will make the price risk transparent and identify the risks remaining with the grower. It will also explain why farmers are not overpaid for a claim as often stated in the national press. Farmers have to meet a large price and/or yield deductible before receiving any payments. Crop insurance is not a substitute for a good marketing plan, it is a complement.
21. Sustainable Growth Rates of Farmer Cooperatives: Who is Growing Broke? - Brian Briggeman and Nathan Smart
Many cooperatives are growing at an exceptional rate. Cooperative growth has been fueled by producer consolidation, a highly competitive marketplace and new opportunities through rising global demand. However, growth at an exceptional rate may be unsustainable and could potentially cause significant financial stress. Cooperatives could get so caught up in growing that they could create problems, or “grow broke.” The sustainable growth rate (SGR) is a financial metric used by many businesses to address this potential growth problem and can be used by cooperatives to ensure their long-run success. Thus, the objective of this research is to better understand the SGRs of cooperatives, provide baseline SGRs, determine key attributes of higher growth rate cooperatives and key indicators of SGR changes.
22. Perceptions about Conservation Practices On-Farm: Adopters vs. Non-Adopters - Jason Bergtold, Jeff Williams, Elizabeth Canales
Conservation is a common practice among farms in Kansas, but more intensive conservation efforts could be undertaken to improve the sustainability of crop production systems and environmental reduce adverse impacts from crop production. The purpose of this project was to examine farmers’ perceptions about intensive in-field conservation practices, particularly adopters versus non-adopters, to provide guidance for farmers, extension and policymakers for promoting conservation adoption on-farm. The conservation practices examined include continuous no-till, conservation crop rotations, cover crops, and variable rate application of inputs. Primary survey data was used to examine the differences about the economic, agronomic and risk perceptions of these conservation practices to identify potential barriers to adoption that still need to be overcome to improve conservation efforts on-farm.
By August 13, 2018
Two-day Fee: $200
Additional member: $180
One-day Fee: $125
Additional member: $110
(Discount available if paying by check, but not by credit card)
After August 13, 2018
Two-day Fee $225
One-day Fee $150
Questions? Rich Llewelyn at email@example.com or 785.532.1504.
To Manhattan, Kansas and the K-State Alumni Center (17th & Anderson):
From the east: I-70 to exit 313. North on Hwy 177 to Ft. Riley Blvd then west to 17th Street. North (right) on 17th to Anderson Ave.
From the west: I-70 to exit 303. North on Hwy K114/K18 (Ft. Riley Blvd) to 17th St. North (left) on 17th to Anderson.
From the north: Hwy 77 south to Seth Child Rd (Hwy 113). South on Seth Child to Anderson Ave. East (left) on Anderson to 17th St.
|Holiday Inn - Campus|
Manhattan, KS 66502
Conference Rate: $99.95 + tax / night
Single or Double
Rates valid August 15, 16, or 17, 2018
Cut-Off Date: July 30, 2018
Use Group Code: RIS
|Four Points, By Sheraton|
530 Richards Dr
Manhattan, KS 66502
K-State Rate: $80 + tax / night
Single or Double
No Cut-Off Date: Ask for K-State Rate
Parking is available in the parking garage, but costs $1.50 per hour. In other lots, permits are required to park on the Kansas State University campus from 7 am to 5 pm Monday through Friday. Limited parking is available at the Alumni Center without a permit. A parking permit is included in the registration fee, but does NOT include the parking garage.
Permits will be available 10:00–12:00 on Thursday, August 18 at the Alumni Center driveway and at the entrance to the parking lot west of the Old Stadium or at the registration table throughout the conference. You MUST obtain your conference parking permit before parking your vehicle on campus. Hang this permit on your rearview mirror, facing the front of your vehicle. This permit is not valid in metered lots.
Parking is permitted only in areas designated for parking
Parking is not permitted on campus streets or drives
Please observe HANDICAP, RESERVED and NO PARKING zones; these are TOW ZONES and violators will be towed.
Limited parking is available in the Alumni Parking. Be sure to get an Alumni Center parking tag from the registration desk.
More parking is available in the lot west of Old Stadium (across Denison Avenue), north of the Catholic Church, using the parking permit.