2015 Progress Agriculture

PROGRESS 2015

Agriculture, Oil & Industry Special to the Great Bend Tribune Sunday, Feb. 8, 2015

Inside • Straddling the animal and human • Kansas’ first community solar worlds, Page 2D array enters service, Page 7D

• Bartlett Grain facility changes lanscape, Page 10D

• The year in ag: Storage capacity on the rise in Barton County, Page 4D

• Why is Kansas called the Wheat State?, Page 11D

• Economic indicators: Growth outlook improves for MidAmerican states, Page 6D

• Kansas congressmen tackle farm issues, Page 8D • Agriculture drives Kansas economy: Impact data now available, Page 9D

of services, Page 3E • Yost photos added to Hall of Fame collection, Page 4E

• Are frack jobs causing earthquakes • What a year it’s been: Fuel prices in Kansas? Page 5E sent consumers on ride through 2014, Page 2E • Oil price slows industry, Page 6E • Local company offers broad range

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• GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015

Straddling the animal and human worlds Becoming a vet as much about answering a calling as it is starting a business

BY DALE HOGG dhogg@gbtribune.com

There is more in common between your family doctor and your veterinarian than you might think.

Both, in most cases, are answering a calling.

Both undergo rigorous schooling.

Both leave school with debt and hunting for a place to practice.

And, both have keen understandings of how the human body works.

Yes, even vets know what is ticking inside of you. Their extensive training also involves traditional medicine. “Vets are not only important to animals, but to the overall health-care system,� said Great Bend vet Nels Lindberg of the Animal Medical Center. Veterinarians are more classically trained or more emphasis is placed on zoonotic diseases (diseases that can be passed between animals and humans) and epidemiology during their veterinary education. “That has been a core part of our education likely since inception of veterinary colleges,� he said. “Having physicians and veterinarians work in collaboration will be best for our society to help control some of the emerging diseases.�

As veterinarians, they have the knowledge on diseases that transmit from animals to humans and humans to animals, as well as the education on human medicine, which is needed for control and intervention strategies beyond individual cases. “Collaboration will be key to us having successful medicines for the world,� he said.

Indeed, veterinarians are needed not only to treat our pets and livestock, but in a broader context, to help with zoonotic disease maintenance. The interaction between animals and humans secures the continuous demand for the profession, and the fewer veterinarians we have, the larger potential for catastrophic disease, according to Michael Dicks, director of the economics division for the American Veterinary Medical Association (AVMA).

Making ends meet Although the profession is needed, Dicks said financial struggles do exist, especially for those beginning to practice. Many veterinarians who are just starting out find that they need to make enough money to pay off their high educational debt while trying to make a living, which can pose a major challenge.

According to Kansas State University’s College of Veterinary Medicine, the average debt reported by its 2014 graduates was $170,380, and graduates in 2013 had similar debt at $170,919.

The average practice salary reported by 2014 K-State graduates was $64,678 and for 2013 graduates, $63,294. For those practicing outside of Kansas, the average starting salaries were a bit higher at $66,057 for 2014 graduates and $66,939 for those who graduated in 2013. “The downturn of the economy impacted veterinary medicine and what graduates could earn in their first year,� said Roger Fingland, executive associate dean for K-State’s College of Veterinary Medicine and director of the Veterinary Health Center. “It is important to educate people who want to be veterinarians about the financial realities. But, I think the value of being a veterinarian has to always be in the discussion.�

mals, or pets, which accounts for about six out of 10 practicing veterinarians, he said.

Food animal veterinarians, those who work with cattle, sheep and pigs as examples, account for one out of 10. Other veterinarians might choose mixed animal practice or work in zoos, animal hospitals, the education field or other industries.

Scholarship opportunities are available for students in many interest areas, particularly for those who want to work in rural areas and seek mixed animal practice or large animal practice, including food animals and other livestock. Fingland said at K-State, rural scholarship recipients receive $25,000 a year if they intend to practice in a Kansas county that is declared rural. Most counties in Kansas have a rural designation.

If the students take the scholarship and don’t practice in a rural area, however, they have to pay that money back, he said. To his knowledge, no students have had to pay the money back, but some graduates will find that some rural areas don’t have enough animals to support a full-time veterinarian. Or, perhaps the environment will not allow the veterinarian to charge the going rate for various services. “I believe there is a need for large animal and mixed animal practitioners in some rural areas,� Fingland said. “Need means there are consumers in that area who perceive that they need veterinary services.

Needing veterinary services and having an environment that financially supports veterinary services are two different things.

Some communities can’t financially support the service.�

DALE HOGG Great Bend Tribune

Veterinarian Dr. Matt Fehr of the Animal Medical Center in Great Bend gets some affection from a patient during a routine checkup. For many, going into veterinary medicine is a calling.

DALE HOGG Great Bend Tribune

The Equine Center at the Animal Medical Center in Great Bend is an example of how veterinary practices have to evolve to meet the needs of customers. Running a practice requires good business sense.

Seeking opportunities Dicks, a veteran agricultural economist, said the objective of the AVMA’s economics division is to find ways to enhance the lifelong value of a veterinary degree. Under-

standing the market for veterinary services and how individual veterinary practices make money are important components that add value.

The biggest area of demand in veterinary medicine is working with companion ani-

A long-lasting career Certain aspects of veterinary medicine are different than others, and veterinarians can choose certain avenues of practice to potentially increase their salaries. Industry veterinarians typically have higher earning potential than mixed animal practitioners, Fingland said.

Like human doctors, veterinarians can specialize as cardiologists, surgeons, internists and radiologists, as examples. Veterinarian specialists tend to make higher salaries, Fingland said, but they also have to go through much more training than general practitioners. Practice ownership also lends itself to higher pay.

Lindberg estimated the average career of a vet is 30-35 years. There are some that practice many years longer, and there are others that practice years shorter. “I would say at this point, the biggest factor that would scare people away from being a vet, is the same as it was 20 years ago, and that is the time commitment to attain the degree, not necessarily the longevity of our career or the money that they will make,� he said. “We all knew when we started that we wouldn’t make as much as other professionals; it’s just most people don’t want to go to college for eight years,� he said.

In terms of the potential shortage, it depends on who one talks to, and what data you look at, the Great Bend vet said. “I would ultimately say we don’t know, but we do know that there are students out there not securing a job right away. I believe we are like all other services; supply and demand will drive it, and the excellent practitioners/business owners will fill the gaps accordingly. “Good practices and good veterinarians will see to it to fill the veterinary needs of their clients and patients, and those looking for veterinary care.

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help those students minimize their debt load number one, and number two, we must help them achieve the goal of rapidly paying them back to reduce interest paid over time, of which will then allow them to hopefully become business owners sooner,” he said.

Students need to understand that just because the loan money is there, doesn’t mean they need to take it all or spend it all. “We have students extern at our clinic buying new vehicles with student loan money,” he said.

“We have to better educate them on the loan repayment period, and show them amortization schedules each semester as they sign the dotted line again to take more money,” he said. They need to see just how much that payment will go up each time and how much interest that will cost them over time, each time they take more money.

“And we have to show them how to live on a budget and cut personal expenses,” Lindberg said.

Much like Dr. Fingland points out, colleges can place students in rural areas, but that doesn’t mean the area will support the veterinarian or practice enough for them to make a living. There are some rural areas that just can’t give enough business to support a practice.

“And much like the ag industry, there is a minimum amount of land you need to farm to cash-flow the business, and that amount continues to increase,” Lindberg said. The same goes for the veterinary business.

“We need to cover more area, more miles, and more animals to support our business goals,” he said. The cost of equipment needed to provided outstanding care must be spread out over more animals and more visits.

For example, AMC has two digital X-ray machines, both being significant investments. “Could we do without them or with older standard X-ray equipment?

Yes. But do are patients get better care due to having better equipment with a much better ability to make an accurate diagnosis? Yes.” In the end, it all depends on the practice and the level of care its veterinarians intend to provide.

Animal Medical Center staff struggle to pull a calf.

Combining business with a calling “Starting a veterinary practice is like starting any other business or buying any other business,” Lindberg said. “You have real estate, inventory, equipment, accounts receivable/payable, potential blue sky, etc.”

From there, it is about meeting cashflow demands given the situation. “To be successful in this business is like any other as well, in that you need a good accountant, a good banker, a good attorney, and good advisors to get you off on the right foot making sure you have all the correct documents in place and the business set up appropriately,” he said.

Once one has those things in place, it’s about providing an undeniable high level veterinary care service, working to be a servant to your team members, the animals, and the customers.

“The financial constraints are probably bigger than they ever have been for new grads, especially if they are carrying a high debt load,” Lindberg said. Their ability to secure lending to purchase a practice or partner into a practice is diminished given their high debt load and minimal cash to put down on a business venture.

From a banker standpoint, there is value to lending to a veterinarian, but if ability to service debt data doesn’t work on paper very well, it increases their

risk in lending the money. While the average debt load of a recent graduate is $170,000, there are routinely students owing over $300,000 as well.

Most people go into business, because that’s what they want to do. Veterinarians, no matter what area of practice they prefer, are no different, Dicks said. He encourages veterinarians, like any other business-minded professionals, to plan ahead to maximize their opportunities.

“We know just like farmers and ranchers, we all weigh life in some ways with the amount of money we’re making,” Dicks said. “People must give up a little return to have the style of life they want.

For veterinarians, that huge (college) debt can be a restraint. If I have debt when I get out of school, that means I may be driving a 10-year-old car, living with my roommate for another five years, and not going out or buying anything.

I may be paying my debt and trying to make a life.”

Fingland, who teaches veterinary business courses, said on the first day of orientation at K-State, he presents new students and their parents with numbers showing what the education will cost for the next four years of veterinary school to make them aware.

“There is no question that there is a financial problem at work, and I worry about it like other people in my position

COURTESY PHOTO

worry about it,” Fingland said. “But, there is value in doing what is your calling. I understand as a veterinarian that I’m not going to make as much money as someone in another profession. I don’t want to be in that other profession, so what difference does it make if that person makes more money than I do?

“We can’t tell young people who aspire to be veterinarians, ‘You shouldn’t do this, because you won’t make as much money as you could doing something else,’” he continued. “Is that what we’re going to tell people who want to teach?

Imagine if somebody would have turned away the wonderful teachers that we had in grade school, high school and college.

That would have been very unfortunate.”

Fingland said preparing students to be business-minded veterinarians involves work in and out of the classroom. In addition to one required business and finance course, veterinary students at KState are allowed to take elective business courses and join organizations such as the Veterinary Business Management Association. They also learn about planning and budgeting through K-State’s Powercat Financial Counseling, available as a free resource for all students.

Lindberg agrees.

“Not all practices are the same, but one thing is for certain, student debt continues to climb, and we have to find ways to

Involving the veterinarian As a livestock producer, Dicks said he believes it is essential to have a veterinarian as part of your health team if you own animals. Sometimes the veterinarian might be considered a provider of last resort or someone whose job can be handled by salesmen or technicians for artificial insemination, embryo transfer, ultrasounding for carcass characteristics or pregnancy, hoof trimming and nutritional planning, as examples.

But, he said in the last 10 years the cattle industry has experienced diseases such as trichomoniasis and curly calf syndrome, among others, that may have surprised some producers. Having a close relationship with a veterinarian could help protect animals from diseases and producers from major financial losses.

“Maybe because a veterinarian wasn’t part of our herd health program, we only found out about these diseases once they happened to us,” Dicks said. “Some of those things cause 20 to 30 percent losses.”

“What we focus on is teaching veterinary students to thrive in a competitive environment, not in an unrealistic environment where there’s no competition,” Fingland said. “There are many things veterinarians can do that others can’t do who don’t have the level of training.

No one will ever replace the veterinarians’ intellect, when they go to a farm to analyze the nutrition that the rancher or farmer is providing, and the environment and how that environment might lead to disease.”

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• GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015

The year in Ag 2014

Storage capacity on the rise in Barton County

BY VERONICA COONS vcoons@gbtribune.com

In the fall of 2013, the Great Bend Co-op broke ground on two additional grain storage units at the Boyd facility, northwest of Great Bend. The newly completed units, built at a cost of nearly $2.75 million, have increased storage capacity by 380,000 bushels, said Matt Penka, grain marketer.

“Even so, we’re still short storage as a whole,” Penka said. More projects are in the planning stages at this time, and should be announced in the near future.

The market is so good, Bartlett Grain Co., L.P. broke ground on a new facility east of Great Bend. Located at 16 NE 50 ave., five 500,000 bushel capacity bins and two 50,000 bushel bins stand shoulder to shoulder now on the south side of U.S. 56. The smaller bins allow Bartlett to separate qualities of wheat for sale to mills with exact specifications for their product.

Andrew Fullerton, Operations Manager of the new facility, says Bartlett Grain is excited about the new facility and is pleased to make the Great Bend and Ellinwood area part of its market.

“There are a number of factors involved in attracting Bartlett,” Fullerton said. “The strength of the local economy, consistent strong grain production in the area, and rail availability are key for us, plus we already have good

relationships with area co-ops and grain buyers.

Headquartered in Kansas City, Missouri, Bartlett has facilities and offices in 11 states and Mexico. The company anticipates the new facility will employ at least 10, and is actively recruiting now for office staff and operators to help run the elevator.

“We’re absolutely confident we will be open and accepting grain ahead of wheat harvest,” Fullerton said.

VERONICA COONS Great Bend Tribune

Bartlett Grain’s new facility between Great Bend and Ellinwood will be ready in time for the 2015 wheat harvest.

A new side rail line (left) is being built at Bartlett Grain’s new facility which will accommodate a 110-car loading train.

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GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015 •

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AG, from page 4D HARVEST The wheat harvest in Barton County started a little earlier in 2014.

Depending on location, drought as well as winter kill were factors in final outcomes. Most wheat was pretty short when it came time to harvest, leading to some issues with harvesting equipment.

June rains brought standing water in many fields around Great Bend, and there were concerns that crops might suffer from drowning over drought. In the end, the county had a better than average fall harvest that had marketers working overtime. Too bad the price per bushel for corn hovered under $5 a bushel.

Dr. Victor Martin, a regular contributor to the Great Bend Tribune, summarized the 2014 harvest in his Oct. 24 column. • Corn – Overall, rainfall timing was great for both dryland and irrigated corn resulting in very good to excellent yields for both. The late summer heat helped mature the crop after a cool start and later than hoped for planting.

However, corn harvest progress was delayed by slow grain dry down. • Soybean – Dryland yields aren’t bad and some have been quite good while most irrigated yields have been good and some fields excellent but many producers aren’t as happy as they were last year. Soybean plants were developing seed when the dry, hot pattern arrived and even though they made good use of the moisture, yields were capped by late season conditions. It was still a good year for

TRIBUNE FILE PHOTO

Great Bend Co-op put into service newly constructed grain storage at its Boyd facility west of Hoisington at the beginning of the 2014 wheat harvest, increasing the capacity by 320,000 bushels.

most growing soybeans. • Grain sorghum – Satisfaction with the crop is all over the place.

Overall, yields where the crop was able to finish were okay to good but nowhere near as high as many in the eastern part of the area experienced

in 2013. Some fields, in fact more than a few, where cut and removed as forage, either as silage or hay. Not an incredible sorghum year but not a train wreck either. • Hay and forage crops – These crops had a good year compared to

the last few. Yields were acceptable to very good with the summer rains and fairly moderate temperatures. The problem for many was drying down and baling the crop in a timely manner and not experiencing quality and crop loss due

to rainfall after swathing.

CATTLE Timely rains also helped fill ponds and green up pastures in the county, which was a welcome turn of events for area cattle producers who had to cull their

herds in 2012 and 2013 due to drought. With fewer cattle available, the market was good for producers. For consumers, the price of beef still topped previous years by nearly double. All in all, not a bad time to be in the cattle business.

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• GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015

Economic indicators Growth outlook improves for Mid-American states The Creighton University Mid-America Business Conditions Index for January, a leading economic indicator for a nine-state region stretching from North Dakota to Arkansas, increased slightly from December’s reading.

Indices over the past several months are pointing to positive economic gains over the next three to six months for the region.

Overall index The Business Conditions Index, which ranges between 0 and 100, rose to 54.8 from December’s 54.4.

The regional index, much like the national reading, is pointing to positive, but slow to modest growth for the first half of 2015. “Firms such as Helmerich and Payne in Oklahoma, which are tied to energy, and John Deere with links to agriculture, have announced layoffs.

I expect these job cuts to grow in the months ahead for states in the region.

However, growth for companies outside of energy and agriculture will more than offset the declines in those sectors,� said Ernie Goss, Ph.D., director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.

Employment The regional employment gauge remained in a range indicating positive but slow growth for manufacturing and value-added services firms in the region. The job gauge fell to 51.4 from December’s 56.5. “Businesses linked to agriculture and energy are laying off workers as firms outside these two sectors are expanding hiring at a healthy pace,� said Goss.

This month supply managers were asked to identify their firm’s biggest economic challenge for 2015. More than one third, or 34.7 percent, named low or declining customer demand as their top challenge while more than one-fifth, or 20.8 percent, reported growing regulatory costs as their biggest challenge for 2015. Other obstacles named were: 19.4 percent said cost of Affordable Care Act; 18.1 percent reported higher input prices; 4.2 percent listed competition from abroad; 2.8 percent said rising interest rates.

Wholesale Prices Last month, the pricespaid index, which tracks the cost of raw materials and supplies, declined to its lowest level in five years.

The wholesale inflation index for January expanded to 54.9 from December’s 50.8. “A strengthening U.S. dollar and weaker global demand have pushed inflationary pressures at the wholesale level lower over the past several months,� said Goss.

Supply managers were asked to project price growth for products that they purchase for 2015.

On average, a wholesale price growth of 2.5 percent is expected, which is well above the 1.2 percent experienced for the U.S. for 2014. Confidence: Looking ahead six months, economic optimism, as captured by the January business confidence index, advanced to 61.8 from December’s 58.1. “Improving economic expectations resulting from lower energy prices more than offset economic pessimism stemming from layoffs among energy and agriculture linked business,� said Goss.

INVENTORIES The inventory index, which tracks the change in

AP PHOTO

In this Jan. 7, photo, cattle rancher Randy Cree adds fuel to a factor at his farm near Big Springs, Kan. Cree has not been able to afford to fill the fuel tanks at his farm, but with prices below $2.00 he plans completely fill his two 300-gallon and one 200-gallon tanks as soon as he can get a fuel truck to deliver it. The ag and energy sectors of the economy are seeing declines in the region, but are being offset by growth in other areas.

the level of raw materials and supplies, fell to 50.0 from 53.4 in December.

Trade: The new export orders index unexpectedly climbed to 57.0 from December’s 52.7. The import index for January declined to 52.8 from December’s 56.7. “Over the past six months, the value of the U.S. dollar has risen dramatically against the currencies of our chief trading partners. This movement has made US goods less competitively priced abroad and foreign goods more cheaply priced in the US. Despite this, the new export orders index moved into a range indicating healthy growth in exports.

I do expect exports and new export orders to move lower in the months ahead,� said Goss.

Other components Other components of the January Business Conditions Index were new orders at 58.6, up from 54.3 in December; production or sales expanded to 60.5 from 49.2 in December; Delivery speed of raw materials and supplies sank to 53.4 from last month’s 58.9.

The Creighton Economic Forecasting Group has conducted the monthly survey of supply managers in nine states since 1994 to produce leading economic indicators of the Mid-America economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

The forecasting group’s overall index, referred to as the Business Conditions Index, ranges between 0 and 100. An index greater than 50 indicates an expansionary economy over the course of the next three to six months. The Business Conditions Index is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time. This is the same methodology used by the National Institute for Supply Management, formerly the Purchasing Management Association, since 1931.

Kansas: The Kansas Business Conditions Index for January sank to 53.8 from December’s healthy 62.6. Components of the leading economic indicator from the monthly survey of supply managers were new orders at 38.5, production or sales at 62.4, delivery lead time at 62.4, employment at 52.4, and inventories at 53.4. “Expansions for nondurable manufacturers in Kansas more than offset weaker conditions among

durable goods producers.

Economic growth will be positive, but slower for the next three to six months for the state,� said Goss.

Minnesota: January survey results mark the 26th straight month Minnesota’s Business Conditions Index has remained above growth neutral. The overall index dipped to a healthy 60.1 from December’s 61.4.

Components of the index from the January survey of supply managers were new orders at 66.2, production or sales at 70.4, delivery lead time at 53.3, inventories at 58.1, and employment at 52.7. “Durable goods manufacturers in the state experienced healthy growth for the month while nondurable goods producers lost economic activity for January. Overall though, the Minnesota economy is expanding at the fastest pace in the region.

The healthy growth will continue for the next 3 to 6 months,� said Goss.

Missouri: The January Business Conditions Index for Missouri climbed to 56.1 from 55.7 December.

Components of the index from the survey of supply managers for January were new orders at 59.6, production or sales at 62.9, delivery lead time at 55.5, inventories at 51.9, and employment at 50.8. “Durable goods manufacturers, including transportation equipment producers and metal manufacturers, will continue to push state growth into a healthy range,� said Goss.

Arkansas: The January overall index, or leading economic indicator for Arkansas, rose to 52.5 from December’s 51.7. Components of the index from the monthly survey of supply managers were new orders at 62.6, production or sales at 48.8, delivery lead time at 59.7, inventories at 46.6, and employment at 48.8. “Durable goods manufacturers in the state are growing at a solid pace while nondurable goods producers are experiencing pullbacks in economic activity.

Value-added services firms, including business services firms, expanded at a very healthy pace. The Arkansas economy will continue to expand in the next three to six months,� said Goss.

Iowa: Iowa’s Business Conditions Index declined for the sixth time in the past seven month. The overall index slipped to 52.2 from December’s 53.4. Components of the index from the monthly survey of supply managers were new orders at 53.3, production or sales at 45.1, delivery lead time at 62.8, employment at 54.0, and inventories at 46.1. “Durable goods produc-

ers, including agriculture machinery manufacturers and metal manufacturing, suffered pullbacks in jobs and economic activity for the month. On the other hand, value-added services firms including engineering and business services companies, more than offset manufacturing losses.

However, the strong U.S. dollar is likely to continue to slow overall growth by making Iowa goods less competitively priced abroad,� said Goss.

Nebraska: For the 13th straight month, Nebraska’s Business Conditions Index remained above growth

neutral 50.0. The January index, a leading economic indicator from a survey of supply managers in the state, rose to a tepid 53.7 from 52.7 in December.

Components of the index for January were new orders at 55.3, production or sales at 52.9, delivery lead time at 49.4, inventories at 54.9, and employment at 55.8. “Strength among nondurable goods manufacturers, including food processors, more than offset weaker conditions among durable goods manufacturers for the month. Overall Nebraska’s economic growth will be positive, but slow for the next three to six months,� said Goss.

North Dakota: North Dakota’s leading economic indicator climbed to a level pointing to positive, but slower, economic growth in the next three to six months. The January Business Conditions Index increased to 53.0 from 52.7 in December. Components of the overall index from the monthly survey of supply managers for January were new orders at 52.8, production or sales at 52.9, delivery lead time at 54.1, employment at 53.6, and inventories at 51.6. “Despite cuts in oil prices, the state’s energy sector continues to expand. Durable and nondurable goods producers in the state are experiencing positive but slower growth.

I expect growth to slow significantly in the months ahead for North Dakota as lower energy investment and employment begin to dampen state growth,� said Goss.

Oklahoma: The Busi-

ness Conditions Index for Oklahoma, a leading economic indicator, dipped slightly for January, signaling positive but slower growth in the next three to six months. The index for January declined to 52.0 from 54.0 in December.

Components of the January survey of supply managers were new orders at 66.6, production or sales at 52.3, delivery lead time at 35.8, inventories at 49.2, and employment at 56.3. “Durable goods producers and nondurable manufacturers experienced solid gains for the month. Even plunging oil prices have yet to have a significant negative impact on Oklahoma’s energy sector,� said Goss.

South Dakota: After moving below growth neutral in November of 2012, South Dakota’s leading economic indicator has been above growth neutral 50.0 each month since.

The Business Conditions Index, from the monthly survey of supply managers, soared to a regional high of 61.2 from December’s 52.4.

Components of the overall index for January were new orders at 56.9, production or sales at 74.0, delivery lead time at 69.7, inventories at 54.9, and employment at 50.7. “Durable and nondurables in the state are experiencing slow, but positive growth. At the same time, plunging oil prices have yet to have a significant and negative impact on South Dakota’s energy sector,� said Goss.

Survey results for February will be released on the first business day of next month, March 2.

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GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015 •

7D

First community solar array enters service Midwest Energy’s onemegawatt community solar array, the largest photovoltaic array in Kansas, entered service last week and began generating electricity to the grid.

Located in Colby, the array covers eight acres of pasture and features 3,963 panels, owned by dozens of Midwest Energy electric customers throughout central and western Kansas.

Each panel is attached to a tracking system, which follows the sun from east to west each day to yield maximum efficiency. “This project is a long time coming,� said Keith Miller, chair of Midwest Energy’s Board of Directors and himself a panel owner in the array. “We’ve seen strong interest from our members in solar, and this array brings them the latest in solar technology.�

Clean Energy Collective (CEC) of Carbondale, Colo., Midwest Energy’s partner in the array, has completed dozens of similar community-owned arrays nationwide. Midwest Energy’s array is the 24th for the company, which builds arrays for maximum power production while delivering the lowest possible price for renewable energy.

With community solar, Midwest Energy members purchase panels directly from CEC; Midwest Energy then purchases the power from CEC, while Midwest Energy provides a credit directly to the member’s bill.

Customers get the benefits of solar ownership, yet bypass the research, construction, and ongoing maintenance and repair required of a rooftop system.

To date, roughly half of the array’s panels have been purchased, which is typical for a project where

COURTESY PHOTOS

solar energy is new in the market. Midwest Energy is offering a rebate to its members on the panels, and CEC announced a financing option earlier this month, which allows buyers to purchase panels with no money down. “We’re excited to put this array into operation,� said Earnie Lehman, Midwest Energy’s General Manager. “We believe this array brings cost-effective solar ownership options to our members, and are proud to add solar to our renewable portfolio.�

For more information on community solar or the Midwest Energy project, visit www.MWEcommunitysolar.com, or call 800.646.0323.

Pictured is the Midwest Energy’s new one-megawatt solar array near Colby. It features 3,963 solar panels owned by dozens of Midwest Energy customers.

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• GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015

Kansas congressmen tackle farm issues

BY TRIBUNE STAFF

WASHINGTON, D.C. – In January U.S. Senator Pat Roberts made history, becoming the first member of Congress to have chaired the top agriculture post in both the U.S. House of Representatives and the U.S. Senate.

He was selected to chair the Senate Committee on Agriculture, Nutrition and Forestry. “I am honored to work for America’s farmers and ranchers,� Roberts said in a news release. “I am proud to bring Kansas leadership to the Committee. I look forward to an aggressive schedule with hearings providing much needed oversight of our farm programs, school meals, the United States Department of Agriculture, the Commodity Futures Trading Commission, and the Environmental Protection Agency. I am humbled to serve as chairman and will continue to be a champion for rural Kansas. “Production agriculture must rise to face a daunting challenge: feeding a growing and hungry global population.

I will work to see that the federal government is an ally, not an adversary, in this purpose. I will fight to ensure farmers and ranchers have the tools they need to advance American agriculture. I will fight barriers to trade opportunities and regulations that threaten our producers’ competitiveness. And I will continue my work to maintain the security of our food supply and ensure science based regulations govern our food and agriculture sectors.�

Roberts said his priorities will include oversight of USDA programs and policies and further hearings on Farm Bill implementation.

The Committee will debate reauthorization of laws dealing with commodity trading, child nutrition, school meal programs and grain inspection.

Roberts will continue to ask tough questions of the Environmental Protection Agency regarding detrimental regulations affecting farmers and ranchers, including duplicative pesticide permitting under FIFRA and the proposed change to the Waters of the U.S. definitions.

He will also conduct greater oversight of the enforcement and implementation of DoddFrank at the Commodity and Futures Trading Commission (CFTC).

On Feb. 2, Roberts responded to President Obama’s Fiscal Year 2016 Budget Proposal, saying it ignores the concerns of the nation’s farmers and ranchers. “I have heard repeatedly from farmers in Kansas and across the country that crop insurance is the key tool in managing risks associated with drought, flood, freeze, hail and other weather events,� Roberts said. “The President’s budget again turns a deaf ear to our nation’s farmers and ranchers by directly cutting the very tool that helps growers produce a safe and affordable food supply year after year.

We have seen these types of proposals from this Administration before and Congress has been right to ignore them. “The President has also suggested creating a new agency for food safety. Unfortunately, this Administration’s track record of increasing regulations and growing the Federal bureaucracy

AP PHOTO

U.S. Senator Pat Roberts was selected as chair of the Senate Committee on Agriculture, Nutrition and Forestry.

Rep. Tim Huelskamp remains consistent in this budget request. In this tough economy, the last thing producers and consumers need is more red tape. “Over the course of my chairmanship, the Agriculture Committee will conduct rigorous and thorough oversight of the departments and agencies within our committee’s jurisdiction. We owe it to the taxpayers, farmers, and ranchers to ensure that their government works in an efficient and effective manner, not in ways that waste taxpayer resources or impose ideological agendas. I look forward to the debate on how we accomplish this.�

Jerry Moran Senator Jerry Moran has also looked at farm issues. In January he introduced an amendment to reverse the decision by the U.S. Fish & Wildlife to list the lesser prairie chicken as a threatened species under the Endangered Species Act. “It is time for Congress to act to protect rural Kansas from the consequences of the listing of the lesser prairie chicken,� Moran said in a news release. “Regulations due to the listing that dictate how people manage their land and resources are yet another example of unnecessary intrusion into private lives and businesses by the federal government. In fact, a number of industries – farming, ranching, oil and gas development, transportation and wind energy – are already feeling the effects of the listing. I am confident there are ways to conserve the species without hindering economic development in rural communities. Listing the bird as a threatened species is not the answer.�

After the amendment failed, Moran commented again in his newsletter: “While a bipartisan

Sen. Jerry Moran majority of Senators supported my efforts by a vote of 54 to 44, the amendment failed to clear the 60-vote threshold needed for adoption as an amendment to S.1 – the Keystone XL pipeline legislation. However, I was able to take the opportunity to educate my colleagues in both a floor speech and personal conversations about the importance of this issue to Kansans. “As I told my colleagues, the listing was based off artificially low population estimates due to the prolonged, historic drought that we experienced. In fact, the last aerial survey showed a 20 percent increase in the lesser prairie chicken’s population due to normalizing rain and snowfall levels. “Listing the bird as a threatened species is not the answer – what we need is more rainfall, not more regulation. I am confident there are ways to conserve the species without hindering economic development in rural communities, and I will continue to push for this straightforward, simple solution. It is time to give Kansas and other states like Colorado, Oklahoma, New Mexico and Texas the opportunity to improve habitats and reduce the economic damage that’s already being done by the listing.�

On another ag-related issue, Moran issued a statement after the Treasury Department modified regulations related to

U.S.-Cuba relations. “I have long fought for the ability of U.S. farmers to sell commodities to Cuba and support the freedom of U.S. citizens to travel there. In July 2000, my amendment to allow the sale of food, medicine and agriculture products to Cuba passed the House with broad support. Yet, since 2005, Treasury Department regulations have continued to hinder trade, and essentially blocked the market from our farmers and ranchers. “Cuba imports the vast majority of its food, including significant amounts of wheat each year. When we don’t sell our homegrown commodities to Cuba, they buy them elsewhere.

Cuba, only 90 miles from our coast, is a natural market for our farmers and ranchers. Instead, Cuba bought $150 million worth of wheat last year from the European Union even though shipping costs were substantially higher. The ability to purchase more affordable U.S. commodities should increase the standard of living of the Cuban people and, in turn, allow them to make greater demands on their repressive government for increased freedom and liberty. “For me it’s both a commonsense and a moral issue that we finally put these policies and regulations behind us and chart a new course for U.S.-Cuba relations.

The Treasury Department

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announcement this week was a step in the right direction.�

Tim Huelskamp In the House, Rep. Tim Huelskamp often fights against over-regulation that hurts Kansas farmers.

For example, at the end of January Hueslkamp announced that he is again cosponsoring the Waters of the United States Regulatory Overreach Protection Act. “This legislation stops the radical rule proposed

by EPA and Army Corps of Engineers to redefine and expand dramatically the Clean Water Act and impose costly permitting processes for farmers, ranchers, home builders, and many other small businesses,� Huelskamp stated in a news release. He cosponsored and helped pass the bill through the House in 2014, but it died in the Senate under then-Majority Leader Harry Reid. “I urge my colleagues to pass this critical bill to protect Americans from the EPA’s unprecedented power grab. President Obama’s EPA is again attempting to bypass Congress, ignore the clear law, and impose their power grab on rural America,�

Huelskamp continued. “This is not a Republican issue or a Democrat issue. It’s an American issue. It is wrong for unelected bureaucrats in Washington to force their rules on us. They want to regulate every drop of water in Kansas, including our road ditches, farm ponds, prairie potholes, swimming pools, water tanks, construction site runoff, and rain puddles.

Rest assured, I will continue to work to protect Kansas agriculture and our other small businesses from this costly over-regulation. It is time to force the EPA to ditch the rule.�

In January, he also supported legislation which included the final $300 million in funding for the National Bio-Defense Facility (NBAF).

Congressman Huelskamp released the following statement: “Since my time in the Kansas State Senate, I have been strongly supportive of NBAF and efforts to make the project happen at Kansas State University. Beginning with my votes for the project in 2008 in the Kansas Senate and continuing with my support of the project at the federal level, I have consistently backed both construction and research efforts in Manhattan.

I am pleased this bill includes the final $300 Million in funding that will bring cutting-edge research to the Big First.�

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GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015 •

9D

Agriculture drives Kansas economy County-level agriculture impact data now available to public MANHATTAN – Kansas and Barton County have a strong agricultural tradition, some of that even predates its statehood, and agriculture continues to be a significant contributor to the state’s economic well-being.

Today, Barton County joins the rest of the state as a leader in wheat, grain sorghum and beef production. The dairy sector is rapidly expanding in Kansas and other sectors of animal agriculture are growing as well. Farmers and ranchers across the state are responding to demand from consumers to raise healthy, wholesome food but are also continuously striving to do better, raising more food using fewer resources. “Kansas agriculture contributes to 37 percent of our economy. Each county in our state plays a key role in making that economic percentage as significant as it is,� said state Ag Secretary Jackie McClaskey. “Breaking down statistics county-by-county provides a

bird’s eye view of our state’s most prominent industry.�

Agriculture is a critical part of Kansas’ past, and it is a key economic driver in our present, but it also holds great potential for our future.

Increasingly, agricultural resources provide raw materials for a broad range of nonfood products, such as chemicals, fibers, construction materials, lubricants and fuels.

Developing and commercializing bio-based and bioenergy products provide new and expanded markets for agricultural feedstocks, it reduces our nation’s dependence on petroleum and other imported materials and it helps diversify agriculture.

As the world population inches closer to 9 billion people and as demand for animal protein increases, Kansas farmers and ranchers will play a critical role in feeding Kansas families and families around the world.

The Kansas Department of Agriculture has released an interactive map depicting the economic impact of agriculture in each of the 105 counties in Kansas.

Barton County statistics include: • 694 farms accounting for 566,088 acres • $278.96 million in crop and livestock sales in 2012 Commodity Production • Wheat: 5.75 million bushels • Corn: 3.23 million bushels • Soybeans: 1.19 million bushels • Alfalfa: 96,900 tons • Cattle on feed: 56,000 12 Barton County Agriculture, Food, and Food Processing Sectors: • Oilseed farming • Grain farming • Tree nut farming • Cotton farming • All other crop farming • Cattle ranching and farming

2007

% change

694

678

+2

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558,977 acres

+1

816 acres

824 acres

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$282,786,000

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$401,964

$417,089

-4

$5,572,000

$4,785,000

+ 16

$9,932

$8,910

+ 11

Average Size of Farm Market Value of Products Sold

culture website, can be used to find agricultural economic facts for each county in the state of Kansas. By interacting with the map and selecting a county, users can see detailed agriculture statistics including farm numbers, crop production and leading agricultural sectors. Data for these facts are pulled directly from National Agriculture Statistics Service’s (NASS) Farm Facts.

The economic impact data is sourced from IMPLAN. To find the map, visit agriculture.ks.gov/countystatistics.

For those who are interested in sharing their county’s agriculture production via social media, infographics containing county facts can be found at flickr.com/photos/kansasagriculture/with/15468342964/.

Each graphic gives statistics, unique to the county selected.

KDA encourages sharing these facts to provide more agriculture knowledge across the state.

2012 Number of Farms Land in Farms

• Dairy cattle and milk production • Poultry and egg production • Animal production, except cattle and poultry and eggs • Support activities for agriculture and forestry • Animal (except poultry) slaughtering, rendering, and processing • Farm machinery and equipment manufacturing The report also lists the impact on the county. These are listed in this order – employment, value added and output. • Direct effect – 645.7, $3,635,158.7 and $100,483,849.5 • Indirect effect – 55.2, $6,335,717.5 and $10,070,691.9 • Induced effect – 37.3, $3,772,213.6 and $5,707,863.1 • Total effect – 738.1, $33,743,089.8 and $116,262,404.5 The map, located on the Kansas Department of Agri-

Crop Sales $96,206,000 (34 percent) Livestock Sales $182,757,000 (66 percent) Average Per Farm Government Payments Average Per Farm Receiving Payments

Farms

Farms by Size, 2012

Land in Farms, 2012

by Land Use

170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0

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• GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015

Bartlett Grain facility changes landscape

BY JIM MISUNAS jmisunas@gbtribune.com

The silos are so new they shine in the sunlight.

Kansas City, Mo.-based Bartlett Grain Company LP is well underway building a five-silo and office and shop complex between Great Bend and Ellinwood. The company will invest about $20 million in the plant and construction east of Great Bend on the Kansas and Oklahoma Railroad.

“We are building a grain terminal that will be a stateof-the-art grain handling facility that will be able to load and unload grain efficiently,” said Andrew Fullerton, Bartlett grain buyer.

“We are excited to be in the area and look forward to serving area grain companies, cooperatives, and farmers.”

The company is on target to be open by the 2015 wheat harvest. The Barton County elevator will join nine other Bartlett grain facilities in Kansas.

The area is around 100 acres and is located at 550 E. U.S. 56 in the Great Bend Township. It is framed on the north by U.S. 56, the south by East Barton County Road, the east by SE 60 Avenue — the location of the Dartmouth elevator owned by Pawnee Valley Co-op; and the west by SE 50 Avenue — the location of Little Giant Fittings.

The new elevator is designed for efficient and high-speed handling of inbound trucks. Road access will be off of U.S. 56.

The facility will have nearly three million bushels of storage and is designed to load out 110 car shuttle trains. Bartlett expects to employ 10 or more people year-round.

“Our focus will be on

JIM MISUNAS Great Bend Tribune

Kansas City, Mo.-based Bartlett Grain Company LP is constructing a five-silo and office and shop complex between Great Bend and Ellinwood. The company will invest about $20 million in the plant and construction east of Great Bend on the Kansas and Oklahoma Railroad.

transportation, handing and export of wheat and grain from producers and other elevators,” Fullerton said. “We look forward to bringing our focus on customer service and access to strong destination markets to the area’s producers and the region’s existing grain elevators.”

Fullerton moved to Great Bend from Wichita on Labor Day weekend and is part of Bartlett’s management staff. Bartlett owns and operates 30 facilities.

This will be the company’s 10th elevator in Kansas, including one at 3311 N. Emporia in Wichita.

Bartlett is a family owned and managed company

which has been operating grain elevators in Kansas since 1907.

“Our goal is to take care of our customer base. We want to add value to the local market for producers and other commercial elevators,” Fullerton said.

“There is excellent grain production in the area and this offers a good opportunity to build relationships with other elevators and producers will get another outlet to shop their grain to other areas.

Bartlett said customers will see improvements in grain prices due to transportation efficiencies and new market access in central Kansas.

Agriculture Farm Real Estate, Livestock, Operating Expenses, Machinery & Equipment, Cash Flow Management

Oil Production

The general contractor for the facility is Mid-States Millwrights and Builders based in Nevada, Iowa, which specializes in the type of construction Bartlett is building. The electrical work has been contracted to Myers Electrical based in Sterling. Haynes Electric of Larned has also performed some electrical work.

“Approximately 25 employees are working on site throughout the construction process, but as you know this varies from timeto-time,” Fullerton said.

All site excavation is being completed by Stone Sand Company, Inc. of Great Bend.

The office building and

scale house, occupying 6,500 square feet, has been constructed by Brentwood Builders based in Great Bend. No electricity was available on-site. Brentwood accomplished the construction by delivering the electricity through generators in wintry weather conditions.

Parts, signs, office furniture, equipment, and vehicles have been purchased locally.

“There has been a concerted effort to use local sub-contractors throughout the process and use as much local employees as possible,” Fullerton said.

“We could not be happier with the process. We’ve had

good weather for construction and are pleased with the progress.”

The rail siding is being constructed by WATCO, which operates the KansasOklahoma Railroad. The numbers working on the rail portion of the project has varied but is typically four to eight people.

They’ve worked around the clock in all types of weather conditions.

Bartlett has acquired concrete, rock, and other road building materials from a number of local companies.

Bartlett operates facilities in Scott, City, Healy, Levant, Moscow, Wichita and three in the Kansas City metro area.

“We really like Great Bend and the local work force,” Fullerton said. “We will be a good fit in Barton County. We are thankful to Barton County for their welcome and strong support.”

Barton County Engineer Clark Rusco has met with Bartlett officials over how traffic to-and-from the new grain-handling facility will impact U.S. 56, which runs along the north edge of the site.

This information has been forwarded to the Kansas Department of Transportation. KDOT has an overlay project this summer and KDOT officials may want to review the pavement striping for the roadway adjacent to the proposed Bartlett plant.

Additional signage will be posted on property, specifically to safely and efficiently direct truck traffic through the facility. Bartlett officials are in discussion with KDOT regarding traffic impact near the facility, but have nothing additional to report at this time.

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GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015 •

11D

Why is Kansas the Wheat State?

BY NICOLE LANE Kansas Wheat kswheat.com

On Jan. 29, Kansas celebrated the 154th anniversary of its statehood.

When the first settlers roamed the prairies of the territory, they probably never imagined that the land they were in would one day become known as the “Wheat State.�

The first wheat crop in Kansas was grown at the Shawnee Methodist Mission near Fairway in Johnson County in 1839.

Production spread westward as the territory was settled eventually becoming a state in 1861.

In the beginning, wheat didn’t grow well in Kansas.

Initially, the spring wheat varieties grown on the plains suffered because of the hot, dry summers.

Yields were low and many doubted that wheat would ever be able to grow successfully in this challenging climate.

In 1874, Russian Mennonite immigrants introduced Turkey Red wheat to Kansas. This hardy variety was planted in the fall and could withstand Kansas’ cold and dry winters. The new wheat could take advantage of the moisture that arrives in the winter and early spring and then be harvested in early summer. This introduction revolutionized the wheat industry in Kansas, and Turkey Red wheat is now the ancestor to all Hard Red Winter Wheat varieties grown across the plains today.

T. C. Henry, a pioneer of the Kansas wheat industry during its formative years, predicted that “winter wheat will doubtless be the great staple of our country� and encouraged farmers to plant winter wheat. A combination of his advocacy and a series of disasters plaguing spring wheat and corn cemented winter wheat into the history books of Kansas. He helped build the foundation for what is now called the “breadbasket of the world.�

Kansas wheat farmers have survived many challenges to maintain Kansas

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In this June 2102, Tribune file photo, wheat rustles in the wind east of Great Bend.

as the “Wheat State.� The 1930’s brought the Dust Bowl to the Great Plains and the Great Depression took its toll on farmers. In addition to the drought, leaf rust attacked the crop of 1935, making a wheat farmer’s survival even harder. At this time the United States was a net importer of wheat and feed grains.

When the government passed the BankheadJones Agricultural Research Act, doubling the federal support for research and extension work on the farm, things started to get better. The technological boom that followed in the 1940s allowed producers to move from horses to tractors and adopt technological

practices.

Technology and improved varieties increased production and added interest in agricultural exports. These changes moved the United States from an importer of wheat to a net exporter with Kansas leading the charge.

Kansas continues to be one of the largest producers of wheat in the U.S., and is the largest flour milling state in the union.

The Kansas wheat industry is a vital part of Kansas’ economy contributing about $3.6 billion to the economy in 2013 and by supporting about 30,000 Kansas jobs.

In 1886 Kansas wheat farmers grew wheat on 68,000 acres, reaping only 19 bushels per acre.

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In 2014, wheat producers harvested 8.8 million acres, earning 38 bushels per acre.

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• GREAT BEND KAN. TRIBUNE • SUNDAY, FEBRUARY 8, 2015

ILS Acquires Knight Feed Lot, Inc. in Lyons, KS

Lee Borck Named 2014 Kansas Stockman of the Year

ILS Acquired Mid America Feeders, LLC in Great Bend, KS

Lee Borck Delivers the Upson Lecture

Jerry Kuckelman Elected to KLA Cattle Feeders Executive Committee

Sam Brownback presents ILS and Ward Feed Yard the Business Appreciation Award of Merit.

Ward Feed Yard featured on “That’s My Farm”

ILS launches a new Company-Wide Safety Program “Safety First”

Brandon Depenbusch promoted to VP of Cattle Operations

Luke Knight promoted to Assistant Manager at Knight Feed Lot

••••About us in 2014•••• ILS has grown into an organization with a feeding capacity of 180,000 head and a farming operation that exceeds 34,000 acres of dry land and irrigated crop production.

Strong leadership and experienced personnel drives ILS and allows for the flexibility and capital required to meet the ever changing market demands necessary to satisfy our customers.

The ILS management team and its employees are dedicated to the principles that made all of its individual feed yards successful for over 56 years.

Each business unit independently focuses on quality and customer service to maintain established business relationships. However, by working together it allows each feed yard to provide a broader line of products and services to long-term customers and new customers alike. These economies of scale provide the framework for greater efficiency and improved cattle performance. We believe this vertically integrated business structure is the way of the future with modern agriculture.

At ILS, we believe there is no nobler of a profession than to grow quality food for mankind.

This is what we do and we do it very well!

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2E

â&#x20AC;˘ GREAT BEND ď&#x161;ŽKAN.ď&#x161;Ż TRIBUNE â&#x20AC;˘ SUNDAY, FEBRUARY 8, 2015

What a year itâ&#x20AC;&#x2122;s been Fuel prices sent consumers on roller-coaster ride through 2014 Hard to believe, but the national average price of gas was more than $1 per gallon higher at the start of 2014 ($3.29) than it was on the last day of the year. On Jan. 1, 2014, WTI crude oil was trading at $98 per barrel and gas below $3 was found in just a handful of states.

In Barton County as of this week, the price hovered around $1.79.

When GasBuddy issued its 2014 Fuel Price

Outlook it said the year â&#x20AC;&#x153;will find more consistent downward pressure on U.S. gas prices than any year since the Great Recession (2008).â&#x20AC;? Of course, nobody anticipated that crude oil prices would plunge so far for so long and that 2014 gas prices would fall to 2009 levels.

Spring-to-Summer Ascent Like clockwork the first quarter brought rising

fuel prices associated with the annual transition from â&#x20AC;&#x153;winter blendâ&#x20AC;? gas to the lower Reid Vapor Pressure (cleaner-burning) gasoline mandated by the EPA. By the end of March the national average stood at $3.53 per gallon, and the price at the pump continued to move higher as gasoline supply declined and ethanol prices weighed on gasoline prices. Ethanol prices through March stood well

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By late April prices in Hawaii reached $4.34 per gallon; California was at $4.21; Illinois averaged $3.90, Connecticut was at $3.85 and New York was just a penny behind at $3.84 per gallon. Motorists in the Great Lakes had their share of headaches too due to a refinery

glitch at BPâ&#x20AC;&#x2122;s Whiting, IN refinery, and a glitch at ExxonMobilâ&#x20AC;&#x2122;s Joliet refinery.

At the same time, refinery problems struck four facilities in the San Francisco bay area (Chevron, Valero, Tesoro and Shell) and on April 29 we saw Californiaâ&#x20AC;&#x2122;s price peak at $4.26 and the U.S. average peaked at $3.70 per gal.

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3E

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â&#x20AC;˘ GREAT BEND ď&#x161;ŽKAN.ď&#x161;Ż TRIBUNE â&#x20AC;˘ SUNDAY, FEBRUARY 8, 2015

Yost photos added to Hall of Fame collection

BY SUSAN THACKER sthacker@gbtribune.com

The Kansas Oil & Gas Hall of Fame and Museum, located at 5944 West Tenth street, was founded in 1989 by a group of oilmen interested in preserving the history of the oil and gas industry in Kansas.

Curator Dean Weis is happy to show visitors the many displays representing all facets of the industry.

The Hall of Fame features pictures and biographies of past recipients.

Six new inductees â&#x20AC;&#x201D; four living and two deceased â&#x20AC;&#x201D; will be added to the Hall of Fame this year at the Oil & Gas Banquet on April 11 at the Great Bend Convention Center.

Six more deceased oilmen will be added to the Honorary Hall of Fame.

These awards are given to members of the Kansas oil and gas community who are selected by a nomination process.

Hall of Fame recipients are chosen for their dedication to and participation in the betterment of the industry, and also for their

SUSAN THACKER Great Bend Tribune

Dean Weiss is curator of the Kansas Oil and Gas Museum. One of his duties is to maintain a scrapbook, adding obituaries of oil producers who pass on.

involvement and service to church, school and civic organizations.

The Kansas Oil and Gas Museum Foundation of

Great Bend is funded 100 percent by donations and memberships.

Usually, the museum is open by appointment.

The only regular hours this year will be from 1 to 5 p.m. on Tuesday and Thursdays, from April 2 to Sept. 29.

The three buildings include a Geology room showing cores, samples and maps; and a Drilling and Completion room that

displays a model drilling rig and the workings of how a well is drilled. The Education Building has the most interactive displays, including a hand crank that illustrates how much energy is needed to light up one or more light bulbs.

There are books, newspapers, and many historical photos. Last year, the museum added some photos donated by Almer â&#x20AC;&#x153;Alâ&#x20AC;? Yost Jr., who was inducted into the Hall of Fame in 2008. He died in 2013 as his 100th birthday was approaching.

Photos include a â&#x20AC;&#x153;spudding unit,â&#x20AC;? or portable oil rig from Yost Oil Company, which Yost owned and operated. He was involved in all facets of the oil production industry, which is one reason he was inducted into the museumâ&#x20AC;&#x2122;s Hall of Fame. â&#x20AC;&#x153;Al was a colorful gentleman and very active in the oilfield community,â&#x20AC;? Weis said.

In addition to the exhibits, the museum has a conference building which can be rented for meetings of any kind.

SUSAN THACKER Great Bend Tribune

These old photos show the activities of the Yost Oil Company. Al Yost Jr., who was inducted into the Kansas Oil & Gas Hall of Fame in 2008, donated the photos to the museum.

If you want to go The Kansas Oil & Gas Hall of Fame is located west of 10th and Patton Road in Great Bend at 5944 10th St. From April through September, the museum is open on

Tuesdays and Thursdays from 1 to 5 p.m.

It is open any time by appointment. Call Dean Weis, 620-2829248.

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5E

Are frac jobs causing earthquakes?

BY SUSAN THACKER sthacker@gbtribune.com

Dean Weis is skeptical about theories that there is a relation between recent Kansas earthquakes and the practice of injecting wastewater into underground wells. The technique is used as a part of several mining processes, including hydraulic fracturing, also known as fracking.

Weis is a retired oilman and serves as curator of the Kansas Oil and Gas Museum in Great Bend.

He notes that fracking is certainly not new. In fact, the archives at the Museum show a record setting frac job was performed

by Dowell in 1963 out of the Ulysses Station. It pumped 547 barrels per minute â&#x20AC;&#x201D; the highest rate in the state â&#x20AC;&#x201D; and used 200,000 pounds of river sand and 5,000 barrels of water with additives. Weis is listed as the assistant engineer of the project.

In January, the Kansas Geological Survey told lawmakers that it needs more money to investigate and monitor an unprecedented spike in earthquakes in the state.

But what many people took away from Agency Director Rex Buchananâ&#x20AC;&#x2122;s report to the House Energy and Environment Committee was that fracking and earthquakes may be related. He said his agency and the U.S. Geological Survey are still studying the problem, but that is their â&#x20AC;&#x153;working hypothesis.â&#x20AC;?

The agency has recorded 206 earthquakes since Jan. 1, 2013, after detecting just five over the pre-

KANSAS GEOLOGICAL SURVEY

This map shows the location of some faults in Kansas. Information was taken from State and Federal Survey and Kansas Geological Society publications. Several faults have been named, including the Chesapeake Fault Zone (in Bourbon, Anderson, and Wabaunsee Counties), Crooked Creek and Fowler Faults (in Meade County), Humboldt Fault (in Nemaha and Pottawatomie Counties), Syracuse Fault (in Hamilton County), and Worden Fault (in Douglas County).

vious 10 years, according to its website. A 4.9-magnitude quake struck last November near Milan in Sumner County. It was reported as the strongest quake in Kansas history, but a report published by Emporia State University says otherwise: â&#x20AC;&#x153;The largest earthquake recorded in Kansas was on April 24, 1867 near Manhattan, and was an estimated magnitude 5.5.

This caused chimneys to topple, walls and foundations to crack, sand geysers, and a 2 foot wave on the Kansas River.

According to the Kansas Geological Survey, at least 125 earthquakes were recorded between 1867 and

1989. Most of these were micro-earthquakes, which are defined as earthquakes that are too small to feel.â&#x20AC;?

(Preston Johnson, Spring 2008) Likewise, most of the recent earthquakes have not been felt on the surface and collectively have done minimal damage.

Fracking is used to get at previously unreachable oil and natural gas deposits. When the price of oil was over $100 a barrel, new wells were being drilled. Some activists who criticized the practice as excessively harmful to the environment saw a correlation between drilling and earthquakes. â&#x20AC;&#x153;I think folks do see a

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Buchanan said.

He added that new geological studies on the issue are being published on an â&#x20AC;&#x153;almost weeklyâ&#x20AC;? basis and one appears to have determined a direct link between fracking and earthquakes in Ohio.

Human activity is not the only possible explanation for the earthquakes, however. Weis suspects they are simply the result of activity along one of

the stateâ&#x20AC;&#x2122;s fault lines. The stateâ&#x20AC;&#x2122;s major fault line, known as the Humboldt fault line, starts near Oklahoma City, runs through eastern Kansas and up to Omaha. But a Kansas Geological Survey map shows there are others.

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services at the Kansas Geological Survey, said it is difficult to rule out the possibility that the current spike is a part of a cyclical trend, because existing data only goes back to the first earthquakes felt

by Kansas settlers in the 1860s. Geological trends can occur on much longer horizons. â&#x20AC;&#x153;It could be a natural phenomenon. It could be that we have a huge swarm that is, timingwise, thatâ&#x20AC;&#x2122;s come in a big bump. Is that likely? No. But I canâ&#x20AC;&#x2122;t say definitively thatâ&#x20AC;&#x2122;s not whatâ&#x20AC;&#x2122;s happening because we donâ&#x20AC;&#x2122;t know for sure yet,â&#x20AC;? he said.

In order to gather more data, the Kansas Geological Survey wants to place six permanent seismic monitors across the state in order to triangulate the exact locations of earthquakes and determine what factors might have caused them. The agency also hopes to gather additional data from privately owned seismic stations and energy drilling operations themselves, although much of that information is considered proprietary and confidential in the energy industry, Miller said.

The Associated Press contributed to this report

Have news or story ideas?

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â&#x20AC;˘ GREAT BEND ď&#x161;ŽKAN.ď&#x161;Ż TRIBUNE â&#x20AC;˘ SUNDAY, FEBRUARY 8, 2015

Dropping oil price slows oil, gas industry

BY JIM MISUNAS jmisunas@gbtribune.com

Thereâ&#x20AC;&#x2122;s good news and bad news in regards to recent lower gas and oil prices.

Consumers are happy because lower gas prices delivers more buying power for other purchases. Local gas stations see customers buying more items when theyâ&#x20AC;&#x2122;re paying less for gas.

However, Central Kansas oil producers have had the opposite reaction. The drop below $50 a barrel for oil has stopped any incentive to continue drilling operations or start new drilling operations.

Jon Callen is president of Wichitaâ&#x20AC;&#x2122;s Edmiston Oil and chairman for Kansas Strong, which educates the Kansas oil industry. He said oil lower demand from a slowing Chinese economy has caused traders to lose confidence in oil as a commodity. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s more oil out there than demand right now,â&#x20AC;? Callen said. â&#x20AC;&#x153;The price of oil has dropped so fast people donâ&#x20AC;&#x2122;t know what they are going to do. It will slow people down.â&#x20AC;?

John O. Farmer operates a small crude petroleum and natural gas company in Russell and stays in close touch with local and regional producers and employees. â&#x20AC;&#x153;We have been hearing from many of our peers that nearly all drilling will cease at current prices,â&#x20AC;? Farmer said. â&#x20AC;&#x153;We are going to be drilling three wells now â&#x20AC;&#x201D; due to new stringent and expensive regulations dealing with the Lesser Prairie Chickens. When we have finish drilling these wells, we do not plan to start back up drilling until the crude price recovers and stabilizes. â&#x20AC;&#x153;Many operators are also shutting down mar-

ginal wells that are not economic to produce or repair,â&#x20AC;? Farmer said. â&#x20AC;&#x153;Lease bonus rates seem to still be high, so we donâ&#x20AC;&#x2122;t see many operators putting together new drilling projects in this environment. For the first time in many years we have been fielding many calls from service companies that are out of work.â&#x20AC;?

Alan D. Banta serves as president for Trans Pacific Oil Corporation in Wichita. â&#x20AC;&#x153;Lower prices have caused us to greatly curtail our drilling activity,â&#x20AC;? Banta said. â&#x20AC;&#x153;We have been drilling about 35 wells per year in central Kansas and we will drill less than half that number if prices stay low. While we have not laid off anyone yet, we are going to have to look closely at our budget and if prices stay below $50 for very long, we will consider reducing our staff.â&#x20AC;?

Tim Scheck of Russellâ&#x20AC;&#x2122;s Scheck Oil Operation said anytime the price of oil drops, the workers in the field are hit the hardest.

Scheck employs a trucking company, employs a machinist and operates a roustabout service. â&#x20AC;&#x153;There are quite a few rigs shut down. The service companies that provide the drilling rigs, holding units and back hoes and the mechanics and truck drivers are hit first,â&#x20AC;? Scheck said. â&#x20AC;&#x153;Our business is down 50 to 60 percent. Itâ&#x20AC;&#x2122;s supply and demand and right now thereâ&#x20AC;&#x2122;s a little bit more supply.â&#x20AC;?

Scheck said improved technology has helped oil producers discover more oil in larger volumes.

Bill Anderson of Anderson Energy in Wichita has seen the ripple affect with larger companies investing in Kansas exploration.

Anderson Energy is heavily invested in western Kansas

operations. â&#x20AC;&#x153;When everybody looks at the future prices, it hurts and weâ&#x20AC;&#x2122;ve already seen lower activity and number of drilling permits down,â&#x20AC;?

Anderson said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve seen layoffs in the larger companies. Companies invested in the southern tier of counties in Kansas have pulled their horns in. A lot of them have shut down their leases and shut down production.

The leases may be available again, but the owners wonâ&#x20AC;&#x2122;t get what they got five years ago.â&#x20AC;?

Banta said Trans Pacfic Oil Corporation is actually one of the fortunate companies. â&#x20AC;&#x153;Luckily, we are an operating company with no oilfield services such as rigs,â&#x20AC;?

Banta said. â&#x20AC;&#x153;The service companies are the ones that are going to get hit the hardest and I would expect to see substantial layoffs at companies related to drilling new wells. Layoffs have started and are drastic in other areas of the U.S. Hopefully, the price will stabilize and the impact to the Kansas oil patch will be minimal.â&#x20AC;?

Farmer checked with IHS (oilfield industry data provider) about rig counts.

Last year there were around 99 rigs active in Kansas and last week there was 39 active rigs, so there are currently around 60 inactive rigs. â&#x20AC;&#x153;Many of these rig crews are being let go,â&#x20AC;? Farmer said. â&#x20AC;&#x153;Drilling contractors we work with have indicated that the remaining rigs that are running only have a couple of contracts ahead of them, then they will be out of work soon.â&#x20AC;?

Farmer also visited with other service providers â&#x20AC;&#x201D; pulling units and logging companies. â&#x20AC;&#x153;Most do not have any work ahead of them,â&#x20AC;? he said. â&#x20AC;&#x153;John O. Farmer

Inc. has seen a substantial increase in oilfield hands requesting job applications for work here at our office.â&#x20AC;?

Callen said Kansas is just a small piece of the oil puzzle that produces nearly 90 million barrels on a good day. â&#x20AC;&#x153;We have to accept whatever the world price is going to be,â&#x20AC;? he said. â&#x20AC;&#x153;Kansas production is important to the state economy. Itâ&#x20AC;&#x2122;s one of the three most important industries in the state. Yet, on the global scale, if it all fell apart, nobody would even notice it. It would be bad for the Kansas oil producers.â&#x20AC;?

Callen believes the price of oil will eventually adjust higher. But it will take time. â&#x20AC;&#x153;What Iâ&#x20AC;&#x2122;ve learned is there is a panic reaction to the price when itâ&#x20AC;&#x2122;s dropping,â&#x20AC;? Callen said. â&#x20AC;&#x153;It will finally reach a point where everybody will realize that we pushed this down too low and it should come back up to a price of around $70 or $80 per barrel. At that price, we can easily survive.

It will slow down drilling in the hot areas of the country.

But it will allow Kansas operators to adjust and get back to business. We donâ&#x20AC;&#x2122;t know how deep it will go or how long it will go before it turns.â&#x20AC;?

Anderson of Anderson Energy is concerned that oil-dependent counties that rely on revenue from the oil and gas industry will see less tax revenue in their coffers. â&#x20AC;&#x153;When the price is less than half from last year, there is always the chance that mill levies and property taxes could go higher,â&#x20AC;? he said. â&#x20AC;&#x153;Oil and gas revenue has a multiplier of eight times in the local economy.

Itâ&#x20AC;&#x2122;s not cost-effective to keep the rigs running. When companies are not drilling or concluding drilling business itâ&#x20AC;&#x2122;s going to have an

affect.â&#x20AC;?

Banta said any positive ripple on lower oil and gas prices is marginal. â&#x20AC;&#x153;The only positive I can think of is that our pumpers have cheaper fuel too,â&#x20AC;? Banta said. â&#x20AC;&#x153;County and state tax revenue will go down drastically. Many people will lose their jobs. Mineral owners will see 50 percent or more reduction in their royalty income and millions of dollars of investment into the Kansas economy will be lost. For the state and people of Kansas, there really is not any real benefit.â&#x20AC;?

As for lower gas prices, consumers will generally have more money to spend elsewhere, according to Farmer. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m not sure this is a good trade off,â&#x20AC;? Farmer said. â&#x20AC;&#x153;We will see increased unemployment, lower oilfield wages, reduced royalty income for farmers, significantly lower tax incomes to the counties â&#x20AC;&#x201D; maybe causing them to consider raising property taxes â&#x20AC;&#x201D; and decreased land values. What we really need is a stable crude price so we can get away from this frantic feast or famine environment.â&#x20AC;?

Oil fell in New York amid speculation that the biggest strike at U.S. refineries since 1980 will curtail crude processing in the worldâ&#x20AC;&#x2122;s leading consumer nation and worsen a global oversupply.

The United Steelworkers union, which represents employees at more than 200 U.S. refineries, terminals, pipelines and chemical plants, stopped work recently at nine sites after failing to agree on a labor contract.

The steelworkersâ&#x20AC;&#x2122; union rejected five contract offers made by Royal Dutch Shell Plc on behalf of oil companies including Exxon Mobil Corp. and Chevron Corp.

The union hasnâ&#x20AC;&#x2122;t called a national stoppage since 1980, when a halt lasted three months. The refineries on strike can produce 1.82 million barrels a day of fuel, about 10 percent of total U.S. capacity, data compiled

by Bloomberg show.

Chinaâ&#x20AC;&#x2122;s Purchasing Managersâ&#x20AC;&#x2122; Index slid to 49.8 last month from 50.1 in December, below a reading of 50 that separates expansion from contraction.

Rising U.S. supply has contributed to a global surplus that drove oil prices almost 50 percent lower last year. The Organization of Petroleum Exporting Countries, which has resisted calls to cut output, boosted production in January as Iraq pumped at a record pace, according to a Bloomberg survey of oil companies, producers and analysts. â&#x20AC;&#x153;Suppliers are not going to stop producing just because of refinery strikes so as soon as refineries get full there is nowhere else for it to go so itâ&#x20AC;&#x2122;s like a dam,â&#x20AC;? said Michael Hewson, senior market analyst at Londonbased CMC Markets Place. â&#x20AC;&#x153;Pressure remains on the downside for prices but thatâ&#x20AC;&#x2122;s not to say we might not have a temporary stabilization.â&#x20AC;?

West Texas Intermediate for March delivery dropped as low as $46.67 a barrel in electronic trading on the New York Mercantile Exchange. Prices have decreased 11 percent this year.

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PRICES, from page 2E acquisition of all of Hessâ&#x20AC;&#x2122;s retail locations. The acquisition expanded Speedwayâ&#x20AC;&#x2122;s footprint from nine Midwestern states to a whopping 23 states into the east and southeast, leaving it with 2,733 companyowned stories, putting Speedway near the top of the largest gas station chains in the country.

ISIS threat quelled In June all eyes focused on the powder keg in the Middle East.

The ISIS army (the Islamic State of Iraq and Syria) swept into Mosul, and damaged Iraqi oil infrastructure. Subsequently the U.S. military response included more than 1,300 air strikes on ISIS forces and the intervention threatened to light a fire under global crude oil prices.

But that didnâ&#x20AC;&#x2122;t happen.

The attack on Mosul was indeed the catalyst that pushed WTI over $100 in June but WTI did not spike to $120 or $130 as many industry observers had projected. It barely got

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FAX them to (620) 792-8381 attention Dale Hogg or email them to dhogg@ gbtribune.com

to $106. And from that point, crude oil prices fell steadily for the last six months of the year.

Why? The answer is clear. The boom in U.S. energy in 2014 brought domestic fuel production to the highest level since 1986. Production from the Bakken region in North Dakota; from the Permian Basin in west Texas and the Eagle Ford shale region of eastern Texas has contributed significantly lower cost oil to the basket of available crudes.

The increased production in the U.S., coupled with substantial production from western Canada and Mexico seemingly nullified the impact any Middle Eastern volatility might have otherwise delivered.

Concurrently, relative weakness in the U.S., China, India and European economies all contributed to a glut of sorts with a global oil supply outpacing demand.

By the end of July, the national average had already shed 20 cents a

gallon from its peak at $3.70.

On Labor Day weekend Americans saw the lowest gas prices since 2010 and

by Halloween more than half of the gas stations in the U.S. were below $3. With the close October came a national average of $2.999, 33 cents lower than where the month began.

November and December brought more of the same. By Thanksgiving the national average was 44 cents lower than 2013 and by Christmas the national average was 90 cents lower. When OPEC met in Vienna on Thanksgiving Day they surprised many by announcing no cut in production and the price of WTI â&#x20AC;&#x201C; $74 the day before â&#x20AC;&#x201C; would shed nearly $20 per barrel by yearâ&#x20AC;&#x2122;s end.

But by year end, sizeable savings had accrued. Motorists in all 50 states saved money on every gallon. Gaps in gas prices were widest in California, Nevada, Arizona, Colorado, Alaska, and Hawaii.

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