KGFA Summer 2012 Newsletter

Summer 2012, GRAIN AND FEED REPORT

Summer 2012

2012 Legislative Session Review Grain Warehouse funding protected in budget Immigration reform stalled for another year Tax plan to give income tax relief to small businesses

A N O F F I C I A L P U B L I C A T I O N O F T H E K A N S A S G R A I N A N D F E E D A S S O C I A T I O N

K S G R A I N A N D F E E D . O R G

2 GRAIN AND FEED REPORT, Summer 2012

President & CEO Tom R. Tunnell Senior Vice President, Government Affairs Ron Seeber Senior VP and Chief Financial Officer Stephanie Jensen Vice President and General Counsel Randy Stookey Vice President of Event Planning Shari Bennett VP of Member Services & External Operations Sarah Sexton-Bowser VP of Marketing & Communications Shahira Stafford Senior Director of Internal Operations Lisa Anschutz Executive Assistant to the President Julie Stueve

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CONTENTS

KGFA closes another successful legislative session...3-4 Grain Engulfment Training launches pilot course...5 Transportation survey results available...6 KGFA selects college scholarship recipients...6 Support agricultural education through the Scholarship Auction...6 KGFA proud supporter of Kansas FFA...6 Members learn, network and golf at Annual Meeting...7 Thank you, Annual Meeting sponsors...7 Paul DeBruce wins Sunflower Award...8 Looking for the 2013 TAL class...8 KGFA staff celebrates tenure...8 Elevator Maintenance attracts 160 members...8 Registered yet for the Cranor?...9 Exhibitor registration open for 2012 Expo...9 Hotel rooms available for Expo...9 KGFA welcomes new members...9 Committees assigned for 2012-2013...9 Trade Talk...9 Staff travels the state visiting members...10 Are you taking full advantage of your KGFA membership?...11

Summer 2012, GRAIN AND FEED REPORT 3

LEGISLATIVE REPORT

KGFA closes another successful legislative session Session concludes and courts draw maps On Sunday, May 20, around 7:00pm, the Kansas legisla-ture completed work for the 2012 session. The session went 99 days, 9 more that the statutory 90 days of fund-ing. Despite the extended length, the legislature failed to approve a redistricting map and it was drawn by a three federal judge panel. They did approve a massive, but controversial, tax reform bill. The legislature returned for the ceremonial end of the session on June 1. Redistricting punted to the court, court kicks back, hun-dreds of candidates file for office. Statutorily, this ses-sion, the Kansas Legislature was only required to ap-prove a budget and redraw the lines of the Congres-sional, legislative and state school board districts. The Kansas legislature went one for two. After 99 days of political bickering and posturing, any and all attempts for both chambers to approve such maps failed misera-bly and in a politically bloody fashion. The tasks of redistricting maps fell to a panel of three federal judges who reviewed different maps approved by different chambers and heard from over 50 intervening parties who have a vested interest in the reapportionment. The court returned a map that completely disrupts nearly every existing legislative district in the state. It places several incumbents together in the same district while leaving several districts without a candidate. The Court de-cision was made on a Friday and candidates had until the following Monday to sign up. This caused a mad rush to the secretary of states office where literally hundreds of individuals new to the process are now vying for political office. Some were the only person to filing essentially electing them to office early. Tax bill approved The Governor signed into law Sen. Sub. for HB 2117, a bill that dramatically alters Kansas tax policy. It was ap-proved by both chambers in a game of political brinksmanship and was originally used as a negotiating tool for the legislature to agree on a less aggressive proposal. However, after the bill was delivered to the Governor, Senate leadership refused to debate a less expensive version of the bill (of which KGFA endorsed) believing that the Governor was bluffing on his intentions to sign the bill into law. The Senate leadership was very wrong. The Governor and House Republican leadership tout the plan as a bold new direction in Kansas tax policy giving small businesses a badly needed shot of “adrenaline.” Senate Republican leadership and Democrats countered that this is dangerous policy and will result in draconian cuts to needed programs. The Kansas Legislative Research De-partment estimates show that the policy will cause a $2.5 billion budget shortfall by 2018 if left unaltered. The bill would take the current three bracket structures for individual income taxes (3.5, 6.25, and 6.45%) and col-lapse it into a two-bracket system using rates of 3.0 and 4.9 %. The bill would totally exempt certain non-wage business income that under current law is subject to individual income tax (income reported by LLC's, Subchapter-S Corporations, and sole proprietorships). Other language would increase the standard deduction amount for sin-gle head-of-household filers from $4,500 to $9,000; and for married taxpayers filing jointly from $6,000 to $9,000.

Governor Brownback signs Senate Bill 83 into law, granting businesses

protection from liability from the purchase of previously owned equip-

ment. KGFA lobbyists Ron Seeber and Randy Stookey were instrumental

in the passage of this legislation.


LEGISLATIVE REPORT

Budget approved, includes Grain Warehouse funding The legislature approved SB 294, the $14.6 billion dollar state budget that includes a 3% reduction in spending from last year’s budget. It was approved by the House by a vote of 80-35 and the Senate 22-13. KGFA was able to persuade the Governor to include $75,000 in his budget to keep the Grain Warehouse program solvent. With some nudging from your Association, the legislature recognized the wise decision of our state’s Chief Administra-tor and included the funding in the final bill. Real property bill to be studied over interim The House approved, but the Senate leadership refused to allow debate on SB 59, legislation amending the Kansas tax code to define commercial and industrial machinery and equipment (CIME) as personal property, rather than real property. Despite a heavy lobbying effort by KGFA and multiple other business community interests, Senate leadership was skittish to allow debate on the bill’s merits and adhered to the will of county appraisers. Instead, the Senate leadership has said they will ask that an interim study be conducted this summer and fall. The legislation is needed to avoid a potential massive impact on Kansas businesses.

In Kansas, commercial and industrial machinery and equipment was historically defined as personal property until a recent decision by the Kansas Court of Tax Appeals (COTA) reversed that definition. The decision has proven extremely costly to businesses that have been affected, and has opened the door to county appraisers across the state to be able to assess and tax commercial and industrial machinery and equipment as real property rather than as personal property. The bills would amend K.S.A. 79-102 of the tax code to ensure that commercial and indus-trial machinery and equipment continue to be assessed and taxed as personal property rather than as real property.

KGFA kills immigration bills KGFA, in conjunction with a number of other business organizations, successfully killed several controversial im-migration bills this legislative session. Some bills mandate the use of e-verify (the federal immigrant verification system) for businesses that contract with any government entity within the state, and provides for liquidated dam-age penalties of 25% of the amount of the contract. Many bills also include law enforcement provisions similar to a law passed in Arizona empowering local law enforcement to detain individuals suspected of being in the country illegally, and include language making it a felony to harbor 10 or more undocumented workers. Language in previ-ous bills would subject your business to a $1,000 fine the first time you are caught with an illegal employee, $25,000 the second time and a permanent loss of your business license on the third offense. Following the hiring procedures outlined in the proposed bills might subject a business to potential discrimination lawsuits from appli-cants. During the budget debate, Representative Anthony Brown amended the budget bill with a provision mandating the use of e-verify for the employees of contractors and subcontractors who have a contract with the state in ex-cess of $50,000. The provision was later deleted in the House/Senate conference committee report. Anti-trust remedy bill to be revisited During the last hours of the session, the House passed twice, but the Senate did not approve the conference com-mittee report for House Sub SB 416. This bill was introduced to respond to a May 4 Kansas Supreme Court deci-sion wherein the Court disregarded the “reasonableness standard” in deciding that a vertical price fixing contract or arrangement between a manufacturer and a retailer was in violation of the Kansas Restraint of Trade Act. The decision, many believed had the potential if read broadly to render certain contracts void if challenged. In order to insure that that was not the case, policy makers quickly introduced legislation to correct the ruling despite the late hour of the session. The bill language in SB 416 made clarification of the language good for only one year. That would virtually guarantee the legislature would re-visit the issue next session. Although legislation did not pass, it is very likely discussion will surface again next session and will be party to an interim study.


INDUSTRY TRAINING, NEWS

Grain Engulfment Training launches pilot course The KU Fire and Rescue Training Institute launched a suc-cessful pilot course for the Grain Engulfment Rescue Train-ing in Topeka on June 5. Both the morning and afternoon hands-on sessions were held at the Topeka Fire Department Training Center. This unique training program allows for fire fighters and elevator personnel to train side-by-side. Partnerships are critical in rural communities, especially when it comes to community safety and education. This course covers several facets of grain handling including: grain bin/hopper/vessel entry and how to perform rescues. Members of the Kansas grain industry take safety very seriously. Preventing accidents is key, but this training is important as the techniques taught here will help local emergency responders react to a variety of situations in communities, on farms and in industries across Kansas. Through the generous donations of grain handlers across Kansas, over $90,000 was raised to finance the training trailer where rescue techniques are taught safely through simulation. Regular courses are expected to begin in August 2012 and will be offered at no cost to the participants as long as the fire departments and local grain employees train together. For insurance purposes, participation of grain or-ganization employees and firefighters MUST be authorized for a job-related assignment by their employer or fire department. As program deliveries begin, everyone should come to class prepared to participate in all facets of this course. Bring your hardhat, gloves, boots and eye protection and be ready for a good day of life safety training. For more information or to request a course contact the Kansas Fire & Rescue Training Institute at (toll free) 866-804-8841 or email at [email protected]. Also, if any company would like to donate old grain bin panels to this train-ing course, please email Glenn Pribbenow at [email protected].

Firemen and local grain elevator personnel participate in the pilot

Grain Engulfment Rescue Training program on June 5 in Topeka.

A training program participant learns how to use a rescue tube in

a grain entrapment exercise.


AGRICULTURAL EDUCATION

Transportation survey results available Thank you to all of the KGFA members that partici-pated in the Regional Elevator Transportation Survey earlier this year. This survey was designed to gather in-formation needed to address the ongoing transportation management and investment decisions for elevators in the region. Your responses as industry experts were im-portant in understanding priorities and trends. Visit www.ksgrainandfeed.org for a summary of the results.

Common bunt seen in wheat crop Several KGFA mem-bers have seen com-mon bunt (smut) in the 2012 wheat crop across Kansas. Man-aging common bunt includes not using seed wheat from in-fected fields or fields around infected areas. Dr. Erick DeWolf

wrote an article this year regarding common bunt. Also, there is a KSU publication regarding common bunt. Both can be found at www.ksgrainandfeed.org. Please use these educational extension resources to inform your producers on best management practices.

KGFA awards college scholarships The Kansas Grain and Feed Association (KGFA) has chosen the following six Kansas high school graduates to receive college scholarships for the 2012-2013 school year: Payton Delong, Admire - to study agronomy at KSU Paul Gutsch, Herington - to study accounting at KSU Kenneth Kays, Weir - to study agribusiness at KSU Christa Milton, Hudson - to study veterinary medicine at Fort Hays State University Roxanne Ochs, Russell - to study chemical engineering at KSU Kristen Powell, Pretty Prairie - to study business at Bene-dictine College 199 applications were received and considered by an independent Scholarship Selection Committee made up of association members.

Each year, KGFA awards one $500 Dub & Inez Memo-rial scholarship and five $1,000 KGFA scholarships. KGFA also awards one $1,000 John Cranor Memorial scholarship, whose winner is selected by the Kansas State University Foundation. The KGFA Board of Directors voted at their April 9 board meeting in Wichita to increase the number of $1,000 KGFA scholarships from five to six for the 2013-2014 school year.

Support agricultural education through the

Scholarship Auction Each year, the Scholarship Auction at the Expo raises thousands of dollars on behalf of Kansas high school students wanting to pursue an education in agricultural-related fields. The Live Auction will take place Wednes-day, November 14 at 4:30 p.m., and the Silent Auction will open at the start of the show on Wednesday and close at noon on Thursday, November 15. Visit www.ksabe.org to donate an item to the Scholarship Auction at the Expo.

KGFA proud supporter of Kansas FFA Last month, KGFA VP of Member Services Sarah Sex-ton-Bowser presented the Agronomy Career Develop-ment Award to the winning team at the 84th Annual Kansas FFA Convention at Kansas State University in Manhattan. KGFA is also a proud supporter of FFA’s “I Believe” campaign and the Kansas 4-H wheat plot variety display at the Kansas State Fair.

KGFA VP of Member Services Sarah Sexton-Bowser (left) presents the

Agronomy Career Development Award to the winning team at the 84th

Annual Kansas FFA Convention in Manhattan.

Common bunt

infected kernels.

Bunt balls and

healthy grains.


2012 ANNUAL MEETING

Members learn, network and golf at Annual Meeting Over 250 KGFA members gathered in Wichita on April 9-10 for the 2012 KGFA Annual Meeting and Golf Tour-nament. The event started with the popular Steak Fry and Hospitality Receptions, where members had the oppor-tunity to network with and enjoy fellowship with other industry professionals. Kansas Statehouse reporter Martin Hawver provided breakfast attendees with a humorous, insider’s look into the contentious 2012 legislative session, followed by educational sessions by Todd Kemp with the National Grain and Feed Association, and meteorologist Mike Smith. Members then played golf at Wichita’s treasured golf course, Terradyne Country Club.

Thank you, Annual Meeting sponsors Thank you to all of the KGFA member companies that financially supported the 2012 KGFA Annual Meeting: ADM Grain, ADM Investor Services, ADM Milling, Agrex, Bartlett Grain Company, BNSF Railway Company, CHS, Cline Wood Agency, CoBank FC Stone, Frisbie Construction, Hannebaum Grain, INTRUST Bank, K.C. Brokerage, Kansas City Board of Trade, Kansas Grain Inspection Service, Kansas Soybean Commission, KC Sup-ply, KFSA, Korol Financial Group, Kyle Railroad, Louis Dreyfus Commodities, McPherson Concrete Storage Sys-tems, Midwest Management Solutions, RBHM&E Kansas City, Rolfes @ Boone, The Scoular Company, Union Pacific Railroad, Watco Companies and West Plains.

(l-r) Troy Presley, Kelly Herrick and Curt

Strubhar visit before the Steak Fry.

Mike Smith, Senior Vice President of Accu-

Weather Enterprise Solutions, talks about

global warming and gives attendees practical

ways to climate-proof their business.

Nathan Jacobs and Neil Schwemmer sponsor

a hospitality reception on behalf of Gavilon

Grain.

Matt Porter and Jackie Mundt volunteer at

the TAL hole and raise $1,000 for the pro-

gram.

(l-r) Jonathan Mayes, Cory Dieball and Alan

Young host a hospitality reception on behalf

of Cargill.

(l-r) Gary Mundhenke, Rich Fisher, Stan

Utting and John Strecker win first place at

the golf tournament.


ASSOCIATION HAPPENINGS

Paul DeBruce wins Sunflower Award Congratulations to Paul DeBruce, executive vice presi-dent of The Gavilon Group, LLC and chief executive officer of DeBruce Companies, for winning the 2012 Sunflower Award, KGFA’s most prestigious award given annually to recognize someone who has made a significant contribution to the industry. DeBruce started his grain company in 1978 and since grew the business to 25 grain facilities and 11 wholesale fertilizer terminals throughout the United States and Mexico.

Looking for the 2013 TAL class Applications are now being accepted for the 2013 Tomorrow’s Agribusiness Leaders (TAL) class. The TAL program is an intensive leadership development program designed to teach KGFA members about the state and federal legislative and regulatory and how to be

a better leader within the industry. If you are not already part of the elite group of TAL alumni and are interested in growing as an industry leader, making immeasurable contacts and learning first-hand the ways of Topeka and Washington, visit www.ksgrainandfeed.org to learn more and apply. *While the majority of the TAL program expenses are paid for by KGFA and corporate sponsorships, there is a $350 tuition that selected individuals or their employ-ers are responsible to pay.

KGFA staff celebrates tenure KGFA is excited to celebrate the 25 and 10 year anni-versaries of Lisa Anschutz and Shari Bennett. Lisa is the Senior Director of Internal Operations and the lifeline behind the membership direc-tory, database, reg-istration procedures and much more. Shari serves at the Vice President of Event Planning and consistently produces sold-out trade shows to the Kan-sas Agri Business Expo, while coordinating numerous other events throughout the year. KGFA members are better served due to the contribution of time and talent from both Lisa and Shari throughout their tenure. Join us in congratulating and thanking these ladies.

Elevator Maintenance attracts160 members In May, 160 KGFA members attended one of three ele-vator maintenance programs. The program covered a gamut of maintenance factors including electricity, vari-ous storage systems, belts, aeration, fall protection and more. A special thanks to the speakers that donated their time and talents: Mark Paul, Lawrence Scanlan, Ray Holliday, Kevin Miles, Delmer Mains, Wade Spencer, Van Buchanan and Jeff Lavery.

(l-r) Gary Gantz, Aileen and Arch DeBruce, Paul and Katherine

DeBruce, and Tom Tunnell at the 2012 KGFA Annual Meeting on April

10 in Wichita. Paul DeBruce was the recipient of the Sunflower Award.

Lisa Anschutz Shari Bennett

Kevin Miles, Rolfes @ Boone, teaches a session on aeration systems at

the Elevator Maintenance workshops.


UPCOMING EVENTS, MEMBER CORNER

Registered yet for the Cranor? The John Cranor Memorial Golf Tournament, one of KGFA's most popular events, is scheduled for Au-gust 13 at the new, award-

winning Firekeeper Golf Course in Mayetta. The regis-tration fee is $180 and includes a prime rib dinner at KGFA on August 12, breakfast, commemorative golf shirt (sponsored by Hammel Scale and KGFA), green fees, cart rental, beer, non-alcoholic beverages, lunch and prizes. Sponsorships are also available for companies looking to support the association while increasing exposure for their product or service. See the enclosed form to regis-ter.

Exhibitor registration open for Expo Vendor registration is now open for the 2012 Kansas Agri Business Expo on November 14-15 in Wichita. Visit www.ksabeorg to reserve your booth space for the largest, indoor agribusi-ness tradeshow in the Midwest!

Hotel rooms available for Expo On November 14-15, the Kansas Agri Business Expo will be in Wichita and hotels fill up fast. So, be sure you're making your hotel reservations early. KABE has reserved room blocks at several hotels, all of which are in very close proximity to the convention center. Visit www.ksabe.org for a list of participating properties. At-tendee registration will be available in September.

KGFA welcomes new members Thanks to the reputation of our membership and indus-try, KGFA continues to grow and provide useful prod-ucts and services for grain handlers in Kansas. Please welcome these companies to KGFA. AgChoice, Springfield, MO Bert & Wetta Sales Inc., Larned, KS J.D. Heiskell & Co., Amarillo, TX PSC Group LLC, Overland Park, KS

Committees assigned for 2012-2013 The KGFA committees have been assigned for 2012-2013. If you volunteered to serve, please look at the en-closed list and confirm the information is correct. Email changes to [email protected]. Please note the new placement guidelines taking place this year. With the exception of the Legislative Commit-tee, only one representative from each company was chosen per committee, and only one committee per per-son was assigned. KGFA is based on a strong commit-tee structure that thrives from input and active participa-tion from all sectors of the industry. We appreciate your understanding.

Trade Talk If you have a short business announcement you’d like included in the newsletter, email [email protected]. Stan Remington has joined Ag Partners Cooperative in Hiawatha as President and CEO, effective June 12. Vickie Kennedy, Lewis Commodities, was elected Chairwoman of the KGFA Membership and Training Committee. Rick Mullen, Ag Valley Coop, was elected Vice Chairman. Congratulations to the KSU Grain Science & Industry Department for graduating 57 students in 2012 - the largest number in recorded history for the department. Japanese trading house, Marubeni, expected to acquire Gavilon Group LLC by September 2012. Former CEO of the American Corn Growers Associa-tion, Larry Mitchell, named administrator of the U.S. Agriculture Department’s Grain Inspection, Packers and Stockyards Administration (GIPSA), effective June 4. Congratulations to KGFA Senior VP, Ron Seeber, for being accepted into the U.S. Chamber Institute for Or-ganization Management Scholarship Program, a non-profit management development curriculum.


NO-TIES TOUR

Staff travels the state visiting members Earlier this spring, KGFA President & CEO Tom Tunnell and VP of Member Services Sarah Sexton-Bowser hit the road for the annual “No Ties Tour” across Kansas. KGFA realizes the value of face-to-face time with our members at their place of business and looks forward to the No-Ties tours every year. During the trips, staff heard concerns from members about issues ranging from harvest conditions to the political landscape in 2012. The forthright and informed level of input received from members provided invaluable ammu-nition for KGFA to better evolve, adapt and serve the needs of its members. KGFA staff appreciates members’ ability to express ideas outside the normal confines of association goals and responsibilities and allow us to be the premier voice for the industry. Thank you to all of you that took the time to talk and allow us into your business.

Midland Marketing in Hays: Vance

Westhusin.

Farmers Coop Equity Exchange: Ted

Behring and Charlie Swayze.

Co-Mark in Cheney: David Smith.

Farmers Coop Elevator in Garden Plain:

Terry Kohler.

Midway Coop in Osborne: Del Prince. Lewis Commodities in Lewis: Vickie

Kennedy.

Southern Plains Coop in Lewis: Bobby

Martin.

Andale Farmers Coop in Andale: Steve

Morris.

KFSA in Hutchinson: Mike Schaffter and

Mitch Williams.

Commerce Brokerage in Wichita: Kevin

Severe.


Chairman

Stan Stark

Farmers Coop Co., Haviland

First Vice-Chairman

Ted Schultz

Team Mktg. Alliance, Moundridge

Second Vice-Chairman

Pete Goetzmann

ADM Grain Co., Overland Park

Immediate Past Chair

Gary Gantz

D.E. Bondurant Grain Co., Ness City

Directors

Mike Barrett

Gavilon Grain LLC, Kansas City

Brad Cowan

Frontier Ag, Goodland

Jeremy Girard

Hannebaum Grain Co. Inc., Salina

Glen Hofbauer

The Scoular Company, Kansas City

Scott McWilliams

Bartlett Grain Co., Kansas City, MO

Deb Miller

Farmers Union Merc. & Shpg., Stockton

Jerry Murphy

Bunge North America, Emporia

Rob Nordmeyer

Cargill Inc., Overland Park

Russ Ronnebaum

Hammel Scale, Wichita

Steve Shaver

Andale Farmers Coop, Andale

Bob Temple

WindRiver Grain, Garden City

Vance Westhusin

Midland Marketing, Hays

Are you taking full advantage

of your KGFA membership?

For details on the following benefits, please visit www.ksgrainandfeed.org or call (785) 234-0461. A comprehensive hospital and medical, group life, dental, salary continuation, acci-dental death and a property/casualty pro-gram are offered through KFSA at a rate which is considerably less than could be en-joyed by an individual firm. Exclusively through KGFA, you can have your employee benefit programs customized and tailored to meet your budget and needs through Harrington Health. Whether it is COBRA, HIPAA, FMLA, FSA, Harrington Health has the answers. In today’s competitive business climate, it is essential that you engage your customer base, and KGFA and Agri-Services Agency has just the program for you. As many of your producers struggle to find health insur-ance, ASA lets you extend insurance to your customers at no cost to you. Does your company need new apparel? Looking for appreciation gift ideas for your customers? Get 10% off Cabela's merchan-dise and 5% off Cabela's gift cards just for being a KGFA member. Turn waiting callers into customers. AMS On Hold Solutions is giving KGFA mem-bers a 25% discount on monthly rates. Pro-mote specials, decrease caller agitation, re-duce hang-ups and enhance your company's image for only $75/month. A 30-day trial is also available. KGFA and Purple Wave are working to-gether to provide members with the best re-source to liquidate your unused assets through an online auction service. Purple Wave will make a donation to KGFA every time a member utilizes their services.


816 SW Tyler Topeka, Kansas 66612

Visit our website for up-to-the-minute association news by scanning this QR Code with your smartphone, or going to www.ksgrainandfeed.org.

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Surviving in a Global Industry

KGFA Summer 2012 Newsletter

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Transcript of KGFA Summer 2012 Newsletter