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Business Briefs

Published 2/2/2013 in Business : Business

National organization recognizes Keller

Doug Keller, certified insurance counselor at Keller Leopold Insurance Agency, was recently recognized for professional leadership and advanced knowledge by the Society of Certified Insurance Counselors, a leading national insurance professional organization.

Keller was awarded a certificate marking more than 15 years of participation as a designated certified insurance counselor, which requires annual completion of advanced education and training.

"Doug Keller's ongoing allegiance and support of the CIC Program is a testament to the value he places on the 'real world' education and customer satisfaction. Your clients, associates and the insurance profession as a whole will benefit from such dedication," said William T. Hold, CIC, CPCU, CLU, president of the Society of CIC.

The Society of CIC is a nonprofit organization of the National Alliance for Insurance Education and Research, which is respected throughout the insurance industry for the high standards maintained in the hundreds of institutes conducted annually in all 50 states and Puerto Rico. Other members include the Society of Certified Insurance Service Representatives, the Certified Risk Manager Courses, James K. Ruble Seminars and The National Research Academy.

Deadline extended for workshops

For anyone who finds crop insurance confusing and marketing their grain overwhelming — K-State Research and Extension has a workshop for you.

Three Risk-Assessed Marketing (RAM) workshops during February will address these issues — two of which will present basic information and one that is more advanced. Two of the workshops will be in Hays and one in Hillsboro. The registration deadline for the Hays locations has been extended to Monday. The deadline for the Hillsboro workshop is Feb. 15.

These workshops use a case study, with participants managing a typical grain farm, said Stacy Campbell, extension agriculture and natural resources agent in Ellis County. Participants will have the opportunity to select type and level of crop insurance, decide on Farm Service Agency program participation, and then work through a typical grain marketing year.

In the RAM I Workshop the case study tools will be limited to cash sales, forward contract and/or puts, Campbell said. The RAM II program will involve more sophisticated marketing strategies and risk-management tools.

RAM workshop dates, locations and contact information for each site include:

* Wednesday: Hays — RAM I (basic) — (785) 628-9430 or tam3@ksu.edu (register by Monday).

* Thursday — Hays — RAM II (advanced) — (785) 628-9430 or tam3@ksu.edu (register by Monday).

* Feb. 19 — Hillsboro — RAM I (basic) — Rickey Roberts, (620) 382-2325 or rroberts@ksu.edu (register by Feb. 15).

More information, including links to brochures for each site, is available at www.agmanager.info and click on RAM workshops, or by contacting Rich Llewelyn at 785-532-1504 or rvl@ksu.edu.

K-State study compares sales data with producer survey method

MANHATTAN — A new Kansas State University study indicates that using sales transaction data in determining the value of Kansas farmland shows a higher — in some cases significantly higher - value for the land than the traditional survey method derived from producer estimates of farmland value.

"The current growth in land values and the many businesses and personal decisions affected by these values warranted more extensive analysis to obtain estimates that were less aggregated than either the state or crop reporting district-level values that were available," said K-State Research and Extension agricultural economist Mykel Taylor. "For this study, we obtained sales transaction data from the Kansas Property Valuation Department, which reflect agricultural land sales in Kansas."

A paper outlining the study is available online at (www.agmanager.info/farmmgt/land/lease/default.asp).

Taylor, along with K-State agricultural economist Kevin Dhuyvetter, embarked on the study in part because state budget cuts in 2009 forced changes in the way land values are reported in Kansas. Prior to 2009, the Kansas Agricultural Statistics Service conducted farmer surveys that allowed land values to be reported at the crop reporting district (CRD) level. There are nine such districts in the state.

"Unfortunately, the CRD-level estimates reported by KAS were discontinued in 2009, so now, no official government-reported data exist of regional values," Taylor said.

KAS does, however, report state average values for irrigated, non-irrigated, and pasture land, based on an annual survey of agricultural producers, asking for their estimate of the value of cropland and pasture land they operate.

Several potential problems exist with these data, however, Taylor said. "The data for these estimates is a survey of people's opinions, which may not be highly attuned to the current land market."

For example, she added, the KAS data have typically lagged behind estimates based on market data, suggesting that changes in land values are moving faster than people not actively engaged in the land markets realize.

Turning to the PVD data for a market-based estimate of land values, the team looked only at undeveloped parcels of land at least 40 acres in size, and only considered non-irrigated cropland and pasture. Characteristics such as parcel size, soil quality rating, percent of pasture and cropland within a parcel, and when a parcel was sold were all used to estimate county-level land values.

"In all cases, the survey-based estimates are lower than the market-based estimates derived from sales transaction data," Taylor said. "For non-irrigated cropland, the analysis using PVD transactions data suggests a state-level value of $2,516 an acre, a 48 percent increase over the 2012 KAS-reported value of $1,700 an acre.

Across the nine crop reporting districts, the differences range from a 15.4 percent increase over KAS values in the Southeast Crop Reporting District, to an 80.6 percent increase in the Northwest CRD."

Pasture values are similarly understated by the survey method, she added, noting that the transactions data estimate of $1,589 per acre for the state is 67.2 percent higher than the KAS-reported value for 2012. Regional differences range from a 17.5 percent increase in the Southeast to a 150.8 percent increase over KAS pasture value for the Northwest CRD.

Study: Cropland rental rates also understated

A separate part of the study that looked at cash rental rates also indicated that USDA-KAS estimates are significantly lower than cash rent estimates using a method of calculating revenue from a crop share arrangement. The decision aid used to guide the latter is the KSU-Lease.xls Excel spreadsheet (www.agmanager.info/farmmgt/land/lease).

"As with crop and pasture land values, many people want to know how recent changes in both the land and commodity markets have affected rental rates for cropland," K-State's Taylor said.

Historically, the ratio of cash rent-to-land value (rent-to-value ratio) has been in the range of 5 to 7 percent, she said. This ratio indicates the annual return landowners can expect on their capital investment from renting land out, excluding capital gains. If that relationship still holds, then a state-level estimate for non-irrigated cropland of $2,516 per acre would imply cash rental rates ranging from about $126 to $176 per acre.

"That leaves a large amount of negotiating room for landowners and tenants," Taylor added, which prompted the economists to use another method. Rather than targeting a particular rate of return on non-irrigated cropland, which may or may not reflect the productivity of the land or current crop prices, cash rents were estimated using a method of calculating revenue from a crop share arrangement.

A comparison of the rental rates from USDA-KAS and those estimated using the KSU-Lease.xls crop share approach adjusted for risk reveals the USDA-KAS estimates are significantly lower — as much as 71.6 percent in the Southwest CRD and 57.4 percent in the Central CRD.

The higher rental rates estimated by Taylor and Dhuyvetter reflect current grain prices, which have been strong. However, any changes in either expected commodity prices or yields (from a continuation of the drought, for example) will alter the rental rate estimates.

"The most important part of negotiating equitable rental rates is to recognize that market and production conditions may change quickly, making continued communication essential to long-term profits for both farmers and landowners," Taylor said.

U.S. Premium Beef's Steve Hunt to speak at K-State conference

Kansas State University's Cattlemen's Day always has numerous events associated with it, but this year's 100th Annual Cattlemen's Day on March 1 will be special in several ways.

"We're kicking off the Henry C. Gardiner Lectureship with inaugural speaker Steve Hunt of U.S. Premium Beef," said Ken Odde, head of K-State's Department of Animal Sciences and Industry. "Henry Gardiner is a visionary leader in beef cattle genetics. We are pleased to honor him by launching this lecture series in his name."

Gardiner, widely considered a pioneer in beef genetics, is founder of Gardiner Angus Ranch in Ashland.

Cattlemen's Day begins at 8 a.m. in K-State's Weber Hall with a commercial trade show and educational exhibits. The program begins at 10 a.m. in Weber 123.

Hunt, who guided U.S. Premium Beef as its chief executive officer from 1996 through January 2013, and now serves as an advisor to the company, will present, "Designing Meats and Meals." Other topics and presenters will include:

* Keeping Your Farm in the Family for the Next Generation - Ron Hanson, University of Nebraska-Lincoln;

* Cattle Market and Industry Short-Run Outlook and Long Term-Prospective - Ted Schroeder and Glynn Tonsor - K-State; and

Afternoon breakout sessions will include:

* Ammoniation: Stretching your forage supply — Dale Blasi and Justin Waggoner - K-State;

* To Clone a Dead Steer, As Long as It's Not Too Dead - David Grieger, K-State;

* Beef Selection Systems to Meet Market Trends - Bob Weaber and Mike MacNeil- K-State;

* Heifer Development in a High Cost Environment - Sandy Johnson - K-State;

* Developing a Strategic Plan for Farm Family Succession - Ron Hanson, University of Nebraska-Lincoln and Producer Panel: Our Approach - moderated by Gregg Hadley, K-State;

* Is All Ground Beef Created Equally? - John Unruh, K-State.

The day also features a ribbon cutting and dedication ceremony for the new Stanley Stout Center from 3 to 4 p.m. just ahead of the 36th Annual Legacy Sale. A celebration social will be held in the Stanley Stout Center immediately following the sale.

More information and online registration is available at www.asi.ksu.edu/cattlemensday.

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