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| Home / Events / Risk and Profit Conference/Registration Info | |
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2010
Risk
and Profit ConferenceAugust 19-20, 2010
K-State Alumni Center
Manhattan, Kansas
Manhattan, Kansas
Breakout Sessions
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Registrants may attend
8
of the 20 sessions listed below. |
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1.
HRW Wheat Basis and Cash/Futures Convergence Issues in 2010. Daniel O'Brien This discussion will revolve around the recent wheat basis/futures/cash convergence issue. There is a perception of the Kansas grain industry that the KCBT wheat futures contract is being influenced by financial and other outside market interests in addition to wheat market supply-demand, though some researchers disagree as well. This discussion will examine the chronology and impact of recent specification changes to flexible storage rates and changes in delivery points and/or mechanisms that have occurred in the CBOT wheat contract, and evaluate whether the KCBT contract (with its fixed maximum storage rates - different now from CBOT) has a hand in some of the non-convergence issues that are happening. There is much to discuss on this issue, with the likelihood that slow wheat movement this summer is setting things up for full elevators and little room for fall crop harvest issues later in the year. |
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2. Bubble Troubles: Asset Bubbles, Stock Market, Land Values, Interest
Rates and Storing Wealth Bryan Schurle Asset bubbles are controversial in the economics profession, but many have been identified in the stock market, housing market and other asset markets. Causes of bubbles are particularly controversial, but markets seem to be vulnerable to the development of bubbles that have had serious consequences for the economy. We will look at asset bubbles, some potential causes, look at the stock market and the land market and discuss land values, farm incomes and interest rates. |
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3. Cellulosic Biofuel Feedstock Production and Contracting: An
Interactive Survey Building Session Jason Bergtold and Jeff Williams Under current agricultural policy, the production of alternative cellulosic biofuel feedstocks, such as switchgrass, sweet sorghum and corn stover, is a likely on-farm enterprise for farmers in the Midwest. The development of these enterprises will depend on the market for these feedstocks, which will likely involve the use of contracts with biorefineries or processors, as well as economic viability at the farm level. This is an interactive session, where farmers will be provided information about these issues, but then will be asked their willingness to participate and views about such a market discussion and a survey exercise. The information will be used to guide research into this area and inform industry about the direction the market needs to take. |
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4. Efficiency of No-Till Production in Central Kansas Aaron Gasper and Michael Langemeier This presentation will compare the efficiency and profitability of no-till and tillage farms in Central Kansas. Efficiency and profitability will be compared using both enterprise and whole-farm data. |
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5. Understanding Credit Quality Allen Featherstone The Kansas agricultural economy continues to experience profitability. However, the overall economy remains sluggish. This has lead to concerns regarding the tightening of credit in the agricultural sector. Therefore, understanding factors consistent with high credit quality are important factors to understand. This presentation will discuss important financial ratios, the relationship between leverage, risk, and return, credit scoring models, and an update of farm level credit quality. |
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6.
Analyzing Calf Market Price Incentives at Video Auctions Lance Zimmerman and Ted Schroeder Research has identified specific ranch-level management practices to produce calves that meet modern consumer preferences for beef quality. Careful investment in genetics, health, nutrition, and animal management programs are necessary at the ranch to meet evolving buyers’ needs and expectations. This study will determine the dollar magnitude of the various aspects of value-added production and prioritize these characteristics based on sale price influence through the Superior Livestock Video Auction. The most influential price determinants will be evaluated based on their tradeoffs and costs of adoption at the ranch using some ranch assumptions on size, location, etc. This approach will provide producers with improved information to enhance calf management decisions based on their own environment and cost structure. |
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7.
Machinery Costs and Efficiency of Field Size and Shape Kevin Dhuyvetter and Terry Kastens Research has consistently shown that the most profitable farms tend to have lower costs than average and one of the areas they differentiate themselves the most is machinery costs. While many factors impact machinery costs, this session will focus on how field size, shape, and distance from farm headquarters impact machinery costs. While these factors may not be able to be explicitly managed to lower costs, it is important to know their impact when thinking about renting or buying additional land. |
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8. What We Do and Don’t Know: Economic Impacts and Drivers of U.S.
Animal Welfare Oriented Changes Glynn Tonsor Over the past couple years Dr. Tonsor has devoted significant energy to analyzing economic issues surrounding animal well-being and welfare oriented adjustments in the U.S. livestock industry. This presentation will highlight key findings and implications of this work. Particular discussion will highlight: 1) identified drivers of ballot initiative voting behavior, 2) impacts of media attention to animal welfare issues on U.S. meat demand, and 3) implications for livestock producers. |
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9. Marketing Grain Using a Storage Hedge Orlen Grunewald Most farmers use on-farm grain storage as a convenience. If you have your own bins, you can get the crop out of the field quicker at harvest. You can take your grain to the elevator later when it isn’t so busy, and you can easily use storage to defer income to the next year. Grain storage bins are not a positive marketing alternative in themselves. A storage hedge is a short hedge placed following harvest with grain being stored on the farm. The farmer is simultaneously long cash grain (grain in storage) hedged with a short futures position. By placing this hedge the farmer is attempting to take advantage of a strengthening basis where the appreciation of the basis is the return to storage. |
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10. ACRE: The Future of Farm Programs? Troy Dumler With the dust barely settled from the debate over the 2008 Farm Bill, Congress has started the process of developing its replacement. Set to expire in 2012, the 2008 Farm Bill established a new optional revenue-based safety net—the Average Crop Revenue Election (ACRE) program. Early discussion in the 2012 Farm Bill debate suggests that ACRE could become the primary safety net program for U.S. crop producers. However, low participation in the program also suggests that many producers do not favor such a shift in policy. This session will discuss the economic and political consequences of moving to an ACRE-type safety net in the midst of record budget deficits, volatile farm income, and increased criticism of U.S. farm programs. |
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11. Inflation, Interest Rates, Deficits and You Joe Arata In this discussion we will look at a possible explanation why the rapid increase in the US Government spending and the money supply has not yet resulted in a corresponding increase in inflation. We will talk about the US public debt, deficits, inflation, interest rate policy, trade balance and the current account. |
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12. Politics, Policies, Profits: Enhancing Competitiveness in an
Uncertain Global Economy Vincent Amanor-Boadu This paper/presentation tracks some of the principal economic policies over the last decade and evaluates their perceived impacts on the performance of the economy. Global trade has expanded and new players have entered the market as policies and politics are altered to make it feasible for people to emerge from poverty. The paper argues that because uncertainty is the only certainty, agricultural business leaders must develop specific strategic management skills that allow them to position their businesses competitively in the global marketplace. Chief among these skills is their ability to build strategic alliances to influence policy makers and politicians to tilt the playing field in their favor. |
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13. Biomass Production in Kansas Michael Langemeier and Richard Nelson This presentation will discuss breakeven switchgrass prices for western, north central, south central, northeast, and southeast Kansas. Representative crop rotations for each region in Kansas and simulated switchgrass yields were used to compute the breakeven switchgrass prices. |
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14. A New Live Animal Traceability System Regime: Lessons from the Past,
Current Overview, and Implementation Lee Schulz, Kevin Dhuyvetter, and Glynn Tonsor The United States Department of Agriculture is developing a new voluntary animal disease traceability system framework. This will involve moving from a single system (National Animal Identification System - NAIS) to a collection of systems led by individual states. This presentation will briefly discuss the likely reasons for NAIS failure and give an overview of the new framework. Emphasis will be placed on summarizing implications of animal traceability for the beef industry and individual producers. Finally, we will discuss the implementation of both public and private traceability programs. |
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15. Measurement of Carbon Emissions by Kansas Agribusiness Retailers Michael Boland and Elizabeth Canales Retail agribusinesses are exempt from the proposed cap and trade legislation passed by the U.S. House of Representatives. However, it is not clear what future proposed regulations might look like. The objective was to estimate the impact of the regulation to determine a baseline cost for Kansas cooperative agribusiness retailers. The cost of compliance (if they were not exempted) for the larger cooperatives was less than $10,000 per location and the average locations had emissions much less than 25,000 tons per year. The main impact of the proposed regulation is likely to be higher fertilizer and energy prices which would be passed on to the retailers (and presumably producers) by wholesalers. |
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16. Effect of Historically Wide Wheat Basis on Crop Insurance: Are Cash
Settlement Prices the Answer? Art Barnaby The recent experience of wide wheat basis may affect crop insurance, with RMA now considering changes from using futures prices to using cash settlement prices. This presentation will discuss these potentials changes and how crop insurance is affected by the situation. |
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17. MAB Australia-New Zealand Trip Leah Tsoodle The Master of Agribusiness (MAB) program traveled to Australia and New Zealand in April. This session will highlight the trip and specifically discuss animal traceability with an example of NZ sheep processing plant. |
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18. Using a Spreadsheet to Manage Expenses Robert Burton Management of expenses is an important activity for farms and other businesses. Participants will experience use of Microsoft® Excel 2007 to enter, sort, find, total, tabulate, and graph expenses. Appreciation is expressed to Dr. Orlen Grunewald for providing info that helped Dr. Burton learn how to perform these activities and to David Widmar for preparing examples. |
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19. Logistical Considerations in the Development of a Cellulosic Ethanol
Industry David Lambert To meet federal mandates on the production of next-generation biofuels, cellulosic ethanol production is targeted to expand from near-zero production in 2010 to over 16 billion gallons by 2022. Dedicated energy crops, herbaceous crop residues, and woody plant byproducts are expected to provide most of the feedstock. This presentation provides an overview of ethanol policies and projects possible logistical systems for an herbaceous crop residue-based ethanol industry. |
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20. Farming: The Next Generation (Making Transition Actually Happen) Kent Miller This session will review the “nuts and bolts” of bringing another generation into the active management and ownership of a farming operation. Employment agreements, stock options, buy-sell agreements, and entity operating agreements will be reviewed to give the operators an idea of strategies to use. A case study farm will be offered to review a common farming scenario. |
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21. K-State International Ag Development and Its Ties and Benefits to
Kansas Timothy Dalton This topic will describe some of the many ongoing projects at K-State that are contributing to global agricultural development and link these projects to the core mission of K-State and its service to the Kansas agricultural community. |
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22. Flexible Cash Rents: The Devil’s in the Details Kevin Dhuyvetter Cropshare lease arrangements have been popular in Kansas historically, however the current trend is to replace traditional crop share leases with fixed cash rent leases. While there are many potential benefits of this, the increased volatility of both input and output markets in recent years increases the financial risk associated with fixed cash rents. Flexible cash rents are very appealing conceptually, but they can be very difficult to define. This session will walk through several specific examples showing how a flexible cash rent lease could be designed. |
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23. The Impacts of Cap and Trade Legislation on the
Agriculture Sector of the Economy Bill Golden, Jason Bergtold, Mike Boland, Kevin Dhuyvetter, Terry Kastens, Jeff Peterson, and Scott Staggenborg In response to concerns over the impact that carbon emissions have on the climate, the United States Congress is currently considering the Clean Energy and Security Act of 2009. The House of Representatives has passed its version of the bill (H.R. 2454, also known as the Waxman-Markey Bill). While the agricultural sector is excluded from emissions caps included in the bill, concerns over the impacts this legislation might have on the agricultural sector have generated numerous economic studies that predict a variety of outcomes. The purpose of this presentation is to provide a summary of the various assumptions, analytical methods, and major findings and implications of several of the key economic studies. |
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24. The New Farm Management Challenge: Pricing in Volatile Markets Todd Ziegler, Arlo Biere, and Kevin Herbel Until recently, the key drivers of farm profitability were production efficiency and cost management, financing and asset management. Because market prices were relatively stable with moderate fluctuation, marketing was not a key driver that most producers focused on. Over the past three years markets—for both commodities and inputs—have been reacting violently. For example the price of corn for July 2010 on the Board has ranged from less than $3.40/bu. to $7.20 per bushel. While volatility may be easing, the need to improve farm marketing for outputs and inputs is apparent. With marketing there is no magic formula and the thought processes are different that for most farm decision making. This session will introduce some of the aspects to consider and promote a discussion and sharing among participants. |
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