Risk and Profit Conference

1. The 2018 Farm Bill: New Decisions for Kansas Farmers
Mykel Taylor, Robin Reid, Dan O'Brien, Monte Vandeveer, Rich Llewelyn

The 2018 Farm Bill presents new opportunities for farmers to manage risk on their operations with increased flexibility, a new data source for county yields, and much more.  This session will focus on the Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) election that is set to begin September 1st for the 2019/2020 and 2020/2021 marketing years.  Mykel Taylor, Robin Reid, Rich Llewelyn, and Dan O’Brien will give on overview of the changes to these farm programs, discuss how the programs performed over the last Farm Bill, present the current economics and MYA outlook, and showcase a decision tool for individual farm analysis.  This breakout session will run 2-hours in length.

2. Supplemental Coverage Option (SCO)
Monte Vandeveer

With more acres expected to go into the PLC program this fall under the 2018 Farm Bill, more producers will be facing the decision of whether to add the Supplemental Coverage Option (SCO) to their existing crop insurance policy.  This session reviews the “nuts and bolts” of how SCO works, and it will also explore factors that may affect farmers’ decisions whether to use SCO.

3. Trade Aid and Conflict
Nathan Hendricks, Joe Janzen

This session will cover issues related to current trade conflicts and the resulting Market Facilitation Program payments. We will discuss the current state of the trade conflict and basic principles for understanding the impact of the trade conflict on Kansas producers in the short run and long run. We will also discuss the methodology used to calculate MFP payments in 2018 and 2019 (using whatever information is available from USDA at that time), the legal constraints in defining the payment methodology, the potential planting and production distortions of MFP 2.0, and describe how the magnitude of the MFP 1.0 and 2.0 payments differs across different types of farms in different regions.

4. Agricultural Trade – The Long View
Allen Featherstone

Trade is an important driver in Kansas farm profitability.  This session will provide a longer view on the relative importance of trade for various agricultural commodities.  Understanding the current situation along with an historical context provides a framework for thinking about some of the disputes currently occurring.

5. History by the Numbers - A Look at Government Farm Program Payments (and other stuff) on Kansas Farms Using KFMA Data
Kevin Herbel

sing KFMA data, this session will look at the history of government farm program payments received by Kansas Farms and how these have changed over time. Included will be a detailed look at estimated Market Facilitation Payments (MFP), other government payments and net crop insurance in 2018. We will examine differences in government payments by farm size, farm type, operator age and profitability level. Crop insurance plays an important role in managing risk and we will look at net crop insurance income (indemnity payments received less premiums paid) for KFMA farms over time and by various factors.

Some of the "other stuff" to be considered will include: the current financial position of farms over time utilizing the Current Ratio (Current Assets / Current Liabilities) and Working Capital Ratio (Working Capital / (Oper Exp + Interest)); Debt and equity position of different farm size, type and profitability levels; Comparison of gross crop value and cost trends; Changes in percent crop acres for primary crops produced; Relationship of net farm income to family living expense and income tax during the past several decades; and, some other family living expense details.

6. Farm Finance Update
Allen Featherstone

2018 turned out to be a much more profitable year for many Kansas farmers than 2017.  Information will be presented regarding a comparison of Kansas and Illinois farms along with comments regarding how 2019 and 2020 are shaping up from a farm financial standpoint.

7. Volatility of Kansas Farm Incomes
Whitney Bowman, Nathan Hendricks 

United States farm policy has sought to minimize farm income fluctuations through programs such as price supports, direct income support, disaster assistance programs, crop yield, and revenue insurance programs. However, several key sources of volatility, such as fluctuations in international trade and macroeconomic conditions remain. This session discusses farm income volatility of Kansas Farm Management Association farms and how it has varied across the state, by type of farm, and over time. Income volatility measures are calculated on both a cash and accrual basis. The implications for farm and farm household welfare will be discussed.

8. How much Debt Is Too Much? Why is Enterprise Analysis Critical for Your Farm’s Competitiveness?
Duane Hund, David Kehler, LaVell Winsor

In this interactive session, members of the Farm Analyst team will give you clues to take home and analyze your business. Are you using your resources in the most efficient manner? Are there alternatives you might not have thought of? How can Finpack analysis work to provide insights to these and many other questions?

9. Farm Income Tax Update
Mark Dikeman

This presentation will include an overview of 2019 income tax rates and brackets, an update on the agriculture related provisions contained in the Tax Cuts and Jobs Act, and provide some perspective after one year with TCJA.  We will spend time covering several of the provisions that most impacted farm income tax returns in 2018, especially the qualified business income deduction (and recently released proposed regulations), elimination of like-kind exchanges for personal property, and depreciation changes.

10. Kansas Land Values
Mykel Taylor

This session will focus on information pertinent to the Kansas farmland market. We will discuss recent trends in land values and cash rents for non-irrigated, irrigated, and pasture land. We will also discuss recent research regarding land values and how they are affected by both agricultural and non-ag factors.

11. The Effect of Wind Turbines, Groundwater Stocks, and Irrigation on Land Values
Gabe Sampson

This session covers two areas of research. First, we estimate land value premiums provided by irrigation and the amount of groundwater stored in the aquifer. We find that agricultural land values are 53% higher for irrigated parcels than non-irrigated parcels on average and that the irrigation premium has increased at an average rate of 1.0 percentage points per year since 1988. For irrigated parcels, land values increase as the amount of groundwater stored in the aquifer increases. Second, we estimate the effects of proximity to wind turbines on agricultural land values. We find that wind turbines do not impact land values when installed on a parcel and do not affect the land values of nearby parcels.

12. Comparing Willingness to Supply and Willingness to Pay for Cattle Traceability
James Mitchell, Glynn Tonsor

We use results from a 2018 survey of cow-calf and feedlot producers to determine producer preferences for traceability system attributes.  Cow-calf producers are more sensitive to cost reductions from implementing cattle traceability relative to changes in output prices. Feedlot producers are more price sensitive to changes in the cost of procuring cattle with traceability relative to the premiums for marketing cattle with traceability. Policies designed to encourage traceability adoption could target implementation cost reductions.

13. KFMA Cow-Calf Management Data Collection Results
Jordan Steele, Amy Boline

KFMA data is regarded across the agricultural industry as one of the best sources of farm-level production and economic data in the country.  Striving for constant improvement, KFMA members and Ag Economists have sought ways to link more accurate cow-calf production and management techniques with the profitability of those cattle herds. A one-page “KFMA Cow-Calf Management Data Collection” survey was created to collect on-farm cattle management data from over 300 Kansas cow-calf operations dealing with animal health, identification, calving and feeding seasons, and livestock marketing.  The results will lead to greater insight of production practices taking place across the state.

A special thanks to the KFMA members, Ag Economists and staff, and Oklahoma State University Extension Agricultural Economics professionals who shared their previous tools and insights that allowed us to launch the data collection survey in use now.  We are excited about the potential it offers. Contact your local KFMA Ag Economists to find out more about the survey and how to be a part of the best farm-level data set in the country!

14. Weathering the Storm in Agriculture: Developing Skills to Cope with Farm Stress
John Forshee, Sonia Cooper, Tyler Husa, Brett Melton, Deanna Turner

The River Valley Extension District Farm Stress/Culture of Health Team presents “Weathering the Storm in Agriculture”, a program developed by Michigan State University’s Extension program.Numerous factors may cause stress for farmers. Many face financial problems, price and marketing uncertainties, farm transfer issues, production challenges and more. Farmers may struggle with stress, anxiety, depression, burnout, indecision or suicidal thoughts.

This workshop is designed to help farmers, farm families, and those who work with farmers understand the signs and symptoms of chronic stress. It includes resources about how to handle stress for a more productive mindset on the farm. Participants will: identify stress signs and symptoms; practice three everyday strategies for managing stress; find out where to go for more help and resources; and make an action plan for managing stress.

15. A Discussion of South African Agriculture With a Farmer in the Heidelberg Region
Brian Briggeman, Dirk van Papendorp

Dr. Brian Briggeman and Dirk van Papendorp, a South African farmer, will have a discussion on opportunities and challenges facing South African agriculture. Dirk is a successful commercial farmer in the Heidelberg region of South Africa (about a 2.5 hour drive east of Cape Town). Since 1935, Dirk’s family has been farming and have served on the board of directors for their local farmer cooperative, Dirk is the current board chairman for Sentraal-Suid Co-operative. Recently, Dirk and two other farmers merged their operations so they can capture economies of scale and implement modern precision farming techniques. Audience members will be encouraged throughout to engage in the conversation.

16. Dispelling the Biggest Ag Technology Adoption Myths
Terry Griffin

Since 2014, Kansas farmers have experienced increased financial stress. On top of this, many farmers report they perceive neighboring farms being more advanced in the adoption and utilization of agricultural technology. Perceptions of being behind on the adoption curve has placed added pressures on investment decisions. Griffin addresses several myths of technology including reporting proportions of KFMA farms possessing the precision agricultural capability over time.   

17. Predicting Fertilizer Prices
Gregg Ibendahl

Fertilizer is a major expense for nearly every grain producer. Thus, the ability to predict future fertilizer prices could help farmers plan their crop mix and best decide when to purchase fertilizer for the next cropping season. Conventional wisdom says that because natural gas is a key component to nitrogen fertilizer, just following natural gas prices is a good way to predict nitrogen prices. However, evidence shows this doesn't work very well and that there are other factors that work better for predicting prices. This session will demonstrate a model that can be used to predict prices.

18. Managing Grain Price Risk in 2019/20 With Contracts, Hedges and Options
Dan O'Brien

19. Forecasting Wheat Basis Using Soil Moisture Measurements
Noah Miller, Mykel Taylor

Wheat basis prices have historically (+10 years ago) followed similar patterns from year to year and the best forecasts of basis at harvest were often historical averages of prior years’ harvest basis. Recent volatility in prices however, have led to newer forecasts that incorporate some type of current, marketing-year information. In this session, we look at the improvement in accuracy that can be achieved by including current soil moisture information (for locations in which grain elevators are located in) in wheat basis price forecasts.