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SPRING 2016 SERVING THE GRAIN HANDLING INDUSTRY IN KANSAS SINCE 1896.

GRAIN & FEED REPORT IN THIS ISSUE: 2016-2017 KGFA SCHOLARSHIP WINNERS Annual Meeting Attracts Nearly 250 Members to Wichita Summary of FMCSA’s Final Rule to Mandate Electronic Logging Devices KGFA Testifies Before Governor’s Blue Ribbon Funding Task Force on Water Resource Management


Save the Date

November 16-17, 2016 Century II Convention Center & Hyatt Regency Hotel, Wichita

Tom Tunnell President & CEO Ron Seeber Senior VP of Government Affairs Stephanie Jensen Senior VP and Chief Financial Officer Randy Stookey Vice President and General Counsel Shari Bennett Vice President of Event Planning Devon Stewart Marketing and Communications Specialist

Covering the Bases Kansas Agri Business Expo

Pete Goetzmann Chairman ADM Grain Co. Glen Hofbauer Vice Chairman The Scoular Company Jeremy Girard 2nd Vice Chairman Hannebaum Grain Co. Ted Schultz Immediate Past Chairman Team Marketing Alliance

Lisa Anschutz Senior Director of Internal Operations

Mark Paul Cloud County Coop

James Jirak Valley Coop

Joe Griffith Bartlett Grain Company, L.P.

Ryan McCoy Co-Mark Grain

Gary Beachner Beachner Grain

Deb Miller Farmers Union Merc. & Shpg.

Brad Cowan Frontier Ag Inc.

Russ Ronnenbaum Hammel Scale

Brent Emch Cargill Ag Horizons

Bob Tempel WindRiver Grain LLC

Jerry Murphy Bunge North America

John Van Meter

Julie Stueve Executive Assistant to the President

Janae McKinney, McPherson – to study Ag. Communications at Kansas State University Jenna Goetzmann, Gardner – to study Ag. Business at Kansas State University Whitney Gutsch, Herington – to study Biological Systems Engineering at Kansas State University Allison Railsback, Mankato – to study Ag. Business at Fort Hays State University Rachel Bellar, Howard – to study Ag. Education at Kansas State University Brooke McNickle, Stafford – to study Animal Science at Kansas State University Suzanne Huntley, Phillipsburg – to study English at Fort Hays State University Kurt Winter, Mount Hope - to study Microbiology at Kansas State University Michaela Strecker, Minneola – to study Radiology and Nursing at Fort Hays State University

Registration Coming This Summer www.ksabe.org

Tyler Phillips, Allen – to study Farm and Ranch Management at Fort Scott Community College BreAnn Anshutz, St. John – to study Software Engineering at Kansas State University Katelyn Bohnenblust, Clay Center – to study Ag. Engineering at Kansas State University SPRING 2016, GRAIN AND FEED REPORT

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ANNUAL MEETING

ANNUAL MEETING

Annual Meeting Attracts Nearly 250 Members to Wichita

Dub Johnson Receives the Prestigious KGFA Sunflower Award

KGFA was honored to host 239 members at our recent annual meeting on April 11-12 in Wichita, KS. Following breakfast, Steve Kopperud, SLK Strategies, provided an update on the turbulent political environment and critical federal issues impacting our industry. Professional Speaker Matt Tenney finished off the morning with his presentation - Serve to be Great: Leadership Lessons from a Prison, A Monastery and a Boardroom.

Congratulations to Dub Johnson, McPherson Concrete and Storage Systems, for winning the 2016 Sunflower Award. Johnson was recognized amongst his peers at the 2016 KGFA Annual Meeting in Wichita on April 12.

The KGFA Annual Meeting isn’t all business….following the popular Prime Rib Dinner on Monday evening, there were several hospitality receptions allowing attendees the time and space to socialize with existing friends and customers. There was also a golf tournament held at Rolling Hills Country Club on Tuesday afternoon in which 124 golfers enjoyed a beautiful day, with no wind on the course and a golf awards presentation after.

The Sunflower Award is KGFA’s most prestigious award given annually to recognize someone who has made a significant and notable contribution to our industry and/or our association. The contribution may be of scientific achievement, marketing, engineering, transportation or management, but not limited to these specifically.

Thank you to all of our sponsors of the KGFA Annual Meeting and Golf Tournament! KGFA Announces New Board Members: Mark Paul, Cloud County Coop Elev. Assn.

Congratulations to Johnson for his 30+ years in the grain industry. Dub has served on the Expo Committee since 1987 and has been co-chair of the committee since 1992. In 2013, Dub graduated from the Tomorrow’s Agribusiness Leadership program.

KGFA Annual Meeting Golf Tournament

Big crowd at Prime Rib Dinner

Mike Morlan, Danville Coop, Mignon Lambley, BNSF Railway, Mike Dean, Ardent Mills and Mark Summers, BNSF gather at the Cargill/ Ardent Mills hospitality reception to visit.

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Rick Kimbrel, Retired CEO of Valley Coop, Steve Morris, Kanza Coop, James Jirak, New CEO of Valley Coop and Kent Hanson, Frontier Trading socialize during the Hospitality Receptions.

First place golf team (not pictured) Doug Story with Watco TAL Alumni Travis Zwenger, Lang Diesel and Darrin Cox, Fairbank Equipment Companies and Joe Griffith, Bartlett & Company and pictured from l to r: Casey Harbour, Watco Companies and PJ raise $1,233 at the T.A.L. fundraising golf hole at the KGFA Annual Meeting Golf Tournament. Congratulations and thank you to these two TAL Alumni for raising Forbes, Watco Companies. the most money at the fundraising golf hole in the history of the T.A.L. program. Tom Tunnell, President and CEO of KGFA visits with Past Chairman Dennis Bedore, a retired General Manager of Stockton Coop

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FMCSA’S FINAL RULE

T.A.L.

Summary of FMCSA’s Final Rule to Mandate Electronic Logging Devices On Dec. 10, 2015, the Federal Motor Carrier Safety Administration (FMCSA) announced its final rule requiring the adoption and use of electronic logging devices (ELDs) by all drivers currently required to complete paper records of duty status (logs). In July 2012, Congress required FMCSA mandate the use of ELDs. The final rule requires fleets and drivers to complete paper logs to adopt and use compliant ELDs by December 2017, unless they are currently using automatic on-board recording devices that are grandfathered (see below). The following is a summary of the final rule’s main points: • FMCSA will allow fleets and drivers using “ELD-like” devices meeting the current standards for automatic on-board recording devices (see 49 CFR 395.15) to continue to use such devices until December 2019, two years after the final deadline for adoption of ELDs. If these devices can be modified to meet the ELD specifications (e.g., with a software upgrade) they may continue to be used after December 2019. • Limited exceptions to the ELD mandate include drivers who use paper logs for no more than eight days during any 30-day period; drivers who conduct driveaway-towaway operations, where the vehicle is the product being delivered; drivers of vehicles manufactured before model year 2000 (due to vehicle connectivity concerns; this is a change from the proposed rule); and drivers who operate using the logbook timecard exception (i.e. short haul 100 air mile drivers). • Drivers who are not required to complete logs because of meeting one of the short-haul exemptions in section 395.1(e) of the FMCSA, are not required to use ELDs. Drivers who occasionally don’t meet the conditions of these exemptions are required to keep a paper log in those instances. Drivers who find themselves in these circumstances more than eight days in any 30-day period are required to use ELDs. • ELDs are required to record vehicle location at every change of duty status and at a minimum of 60-minute intervals. To protect driver privacy, required information reported to enforcement officials from the devices will be limited to recorded location during on-duty time at a precision of approximately one mile, and during off-duty time of within 10 miles. • Because ELDs effectively negate the need for supporting documents to verify driving time, the FMCSA has implemented new document retention requirements to verify onduty, not-driving time. These documents include bills of lading, itineraries, schedules or equivalent documents indicating the origin and destination of a trip; dispatch records, trip records or equivalent documents; expense receipts related to on-duty not driving time; text messages, email messages, instant messages or other electronic mobile communications transmitted

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through a fleet management system; and payroll records, settlement sheets or other documents reflecting driver payments. All supporting documents must contain driver identification, date, vehicle location and time. Drivers are required to submit such documents within 13 days of receipt and produce those in their possession to law enforcement upon request. Fleets are required to maintain them in a manner that will facilitate being easily matched to the logs. • ELDs must be able to transfer data electronically via either a “telematics” approach capable of wireless Web service or a “local” method capable of Bluetooth and USB 2.0 transfer. In all circumstances, drivers must be able to show a roadside inspection officer a graph-grid of their hours of service compliance, either on the ELD’s display or on a hardcopy paper printout. • Manufacturers are required to test and certify to the FMCSA that their devices meet the new standards.

T.A.L. Class Completes Session I

• The rule prohibits motor carriers from using information from ELDs to pressure drivers into violating regulations. The final rule also requires ELDs to either automatically mute or allow a driver to turn off or mute the volume on the ELD (or the fleet management system with integrated ELD functionality) when they have logged into the sleeper berth status in the ELD.

The 2016 Tomorrow’s Agribusiness Leaders Class traveled to Topeka for two days and completed session I. During these meetings they learned of many challenges facing the state, our top leader’s plans to move Kansas forward, and what they hoped to accomplish this legislative session. They received staff briefings on the legislative process and the roles and history of KGFA and KARA. During the session, the T.A.L. class enjoyed a detailed policy briefing and a private breakfast with Attorney General Derek Schmidt. The class then met with Associated Press Bureau John Hanna, on how to accurately communicate a message to the press. They also had a working lunch with Deputy Secretary of Agriculture Chad Bontrager and were updated on the many functions the agency plays. Finally, they received training on effective lobbying methods and put those practices to good use during Legislative Action Day on the 27th. The 2016 class showed astute talent in communicating the association’s message to the Legislature and we anticipate that they will continue to excel during future T.A.L. sessions.

• In the event that an ELD malfunctions, the driver is required to immediately begin completing a paper log and to reconstruct logs for each of the past seven days, unless the driver already possesses the records or the records are retrievable from the ELD. ELDs must be repaired within eight days, subject to an FMCSA-approved extension. • Authorized use of a commercial motor vehicle (CMV) for personal conveyance will not be recorded as on-duty driving, but rather off-duty time.

KGFA

• Drivers will be able to make edits and annotations to their electronic logs; however, the edits will not overwrite or erase the original record, which will be retained. Employers will be able to request edits or annotations, but those must be approved by the driver.

The 2016 T.A.L. class attending session I:

Matt Case, Farmer’s Cooperative Assn., Baxter Springs Blake Connelly, Southern Plains Cooperative, Lewis

• All ELDs must be capable of exporting data in a standard file format to facilitate importing by other systems. However, devices and systems are not required to be capable of importing these records.

Tatum Couture, AgMark, LLC, Beloit Valarie LaPean, Cargill, Overland Park

KARA

Christopher Stevens, Farmers Coop Grain Assn., Conway Springs Samantha Tenpenny, ADM Fertilizer, Overland Park Derrick Tice, Innvictis, St. Francis Kristin Williams, Randall Farmers Coop Union, Randall

Barbara Padgett, Pride Ag Resources, Dodge City

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The next T.A.L. session is in July and entails traveling to Washington DC and meeting with our Congressman, industry leaders, and other officials. The T.A.L. class will sneak in a little sightseeing as well. If you or one of your association colleagues are interested in applying for this premier agribusiness leadership program, applications are being taken for the 2017 class at www.ksgrainandfeed.org or www.ksagretailers.org.

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LEGISLATIVE ACTION DAY

CHEMICAL REMEDIATION REIMBURSEMENT PROGRAM

Legislative Action Day a Great Success In January, the Kansas Grain and Feed Association, in conjunction with the Kansas Agribusiness Retailers Association and the Kansas Cooperative Council, held its Legislative Action Day at the Statehouse. The day started out with a lunch for members at the Topeka Country Club where Senate Majority Leader, Terry Bruce, and House Majority Leader, Jene Vickrey, spoke to the audience regarding challenges facing the legislature this session. They reviewed the hot button issues facing the legislature including the year budget deficit and school finance court challenges. After the presentations, KGFA staff, Ron Seeber and Randy Stookey, and KCC President, Leslie Kaufman and KCC Member Services Director, Mandy Roe, gave a briefing to members of key

Agricultural Chemical Remediation Reimbursement Program: Update In 2000, the Kansas Legislature passed the Agricultural and Specialty Chemical Remediation Act which created the Remediation Reimbursement Program and the Kansas Agricultural Chemical Remediation Reimbursement Fund (Remediation Fund).

points they need to update their legislators on regarding the industry. Those items include proper funding of the state warehouse program, taxation policy, common sense immigration reform, and water policy. After the briefing, members headed to the statehouse and met with their elected representatives and senators. After the meeting, members returned to the Country Club where our members enjoyed dinner with numerous legislators and other elected officials.

The Remediation Reimbursement Program provides financial reimbursement of expenses incurred while performing remediation activities for agricultural chemical and fertilizer contamination, as ordered by the Kansas Department of Health and Environment (KDHE) for properties enrolled in the Voluntary Cleanup and Property Redevelopment Program.

The association staff is very appreciative of our members who set aside work and traveled to our state capitol. Their actions speak volumes to our legislators and will help the industry promote good policy and avoid proliferation of impractical agendas.

Under the Reimbursement Program, commercial grain elevators and participants in the ag-chemical and fertilizer industry pay fees into the Reimbursement Fund. The Board then distributes up to $200,000 from the fund to applicants of eligible remediation sites. The Remediation Fund receives no state general fund money, and is 100% financed by annual assessments on licensed commercial grain warehouses, custom fertilizer blender licensees, commercial fertilizer registrants, agricultural chemical registrants, and pesticide dealers. The Reimbursement Program is administered by a governor-appointed body: the Kansas Agricultural Remediation Board (KARB). The KARB consists of five governor-appointed members and two ex-officio representatives: an agricultural retailer, an agricultural producer, an agricultural (grain) processor, a specialty chemical distributor, and an agricultural and specialty chemical registrant.

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Ex-officio members represent the KDHE and the Kansas Department of Agriculture. Since 2009, reimbursement requests have exceeded the amount paid into the Reimbursement Fund. Therefore, pursuant to the requirements of the act, a priority-based ranking system is utilized for all applications received, by which each application is reviewed by the KDHE and given a priority score. Applications involving potential risk to human health and safety are given a higher priority level. Any application which is not reviewed by the Board in a quarter, due to an insufficient fund balance, is carried forward to future Board meetings to be reviewed. During 2015, the KARB met four times to review and consider reimbursement applications. The Board ordered reimbursement of forty-three (43) applications for fertilizer and ag-chemical remediation project expenses, totaling $1,031,013. Since 2001, the Remediation Fund has assisted in paying $16.75 million to grain elevators, ag chemical and fertilizer facilities across Kansas to help offset non-insurable expenses incurred through the remediation of environmental contamination, furthering the goal of ensuring clean soil and water in Kansas. This remarkably beneficial program is currently underfunded, however, by around $4.5 million. Next KARB meetings: June 10th, September 16th, and December 9th. Applications must be submitted four weeks prior to the date of the meeting to be considered.

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STATE AND NATIONAL New Anti-WOTUS Measure Fails in Congress Source: NGFA The Senate recently considered new amendments to legislation by Sen. John Hoeven, R-N.D. which would have blocked the Environmental Protection Agency’s “Waters of the United States” rule under the Clean Water Act. The amendments failed to reach the 60 votes needed for adoption.

KGFA Bylaws Udated for the Electronic Age

At the 2016 KGFA Annual Meeting, members present ratified a previous Board amendment to the KGFA bylaws. KGFA Chairman Pete Goetzmann called the Annual Meeting to order and accepted a motion to accept the Board’s April 13, 2015 amendments to the KGFA bylaws. The

USDOT Proposes Increased Rules on CDL Training The U.S. Department of Transportation Federal Motor Carrier Safety Administration (FMCSA) recently proposed new requirements that could discourage potential drivers from seeking a commercial driver’s license (CDL) and dissuade employers from providing opportunities for CDL training. The proposed rule, released March 4th, makes modifications to the FMCSA’s Entry Level Driver

Four Democrats voted for the amendment: Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Claire McCaskill of Missouri and Joe Manchin of West Virginia. One Republican, Susan Collins of Maine, voted against the amendment. The KGFA joined hundreds of organizations and the Kansas Attorney General’s office, over the past year challenging the WOTUS rule, which extends federal jurisdiction over most waters of

motion was seconded, and the members present voted to approve the KGFA bylaws, as amended. The motion followed an amendment to the KGFA bylaws on April 13, 2015, at a regularly scheduled meeting of the KGFA Board of Directors, which allowed notice of annual meetings and Board of Directors meetings by means of electronic mail. Pursuant to Article XX, Section 2, of the bylaws, the Board’s amendments became effective at the time they were adopted by the

Training (ELDT) requirements, including the establishment of minimum training requirements that must be met before testing for a CDL. The proposal requires 30 hours of behind-the-wheel (BTW) training for a Class A license and 15 hours for a Class B license. It also includes a registration requirement for the employer to become an “entry-level driver training provider.” In comments submitted to FMCSA, the National Grain and Feed Association (NGFA) noted that an onerous process for becoming a training provider will further shorten the supply of CDL drivers. NGFA maintains that BTW

STATE AND NATIONAL OSHA’s Process Safety Management: Update

the states, as well as ditches, ponds and land near water and ephemeral streams. The new WOTUS rule would dramatically expand the scope of federal authority over water and land uses across the United States. The groups opposing the measure have called for the rule to be withdrawn. The regulation took effect in August 2015, but a panel of the Federal 6th Circuit Court of Appeals has issued a nationwide stay, which will remain in place until litigation is complete.

Last July, through a guidance memo, the Occupational Safety and Health Administration (OSHA) arbitrarily changed its “retail facility” interpretation under Process Safety Management (PSM) regulations. Since that time, KGFA has joined agribusiness organizations across the nation to require retraction of its change to the regulations. Prior to last July, farm supply retailers were exempt from complying with the PSM regulations. If left unchanged, these regulations will place significant time and cost burdens on all farm retailers of anhydrous ammonia. The revision is in response to the ammonium nitrate explosion that occurred in West, Texas in 2013. Following the incident, President Obama issued Executive Order (EO) 13650 “Improving Chemical Facility Safety and Security.” OSHA previously defined a retail facility as one that derived more than 50 percent of its income from

Board. Article XX, Section 1, of the bylaws required the Board’s April 13, 2015 amendments to be approved or rejected by a majority of the members present at the next annual meeting. Notice of the board’s bylaw amendments and the ratification vote to take place at the 2016 KGFA annual meeting was provided to all KGFA members via electronic mail on March 31, 2016, more than ten days prior to the date set for the 2016 annual meeting.

FSMA seminars in Kansas The KGFA is partnering with NGFA to conduct regional seminars in Kansas to educate industry members on the far-reaching new feed safety rules being promulgated by the Food and Drug Administration (FDA) to implement the Food Safety Modernization Act (FSMA). The seminars are part of an ongoing series of sessions being conducted in cooperation with NGFA and state feed regulatory agencies that will help

training should not be required; but if it is required, the training curriculum should have no time requirement and be outcome-based. Regarding the employer requirement, the gateway to a CDL often begins at grain, feed and processing businesses that are not solely engaged in trucking. To date, these businesses have been able to address a need for multi-disciplinary employees by using in-house expertise to conduct training ahead of CDL tests. FMCSA must craft its requirements for training providers in a manner that maintains flexibility for employer-based training.

FDA Publishes Final FSMA Sanitary Transportation Rule Source: NGFA The U.S. Food and Drug Administration on April 6 officially published its final regulations implementing the sanitary food transportation provisions embodied in the Food Safety Mod-

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direct sales of highly hazardous chemicals to the end user, otherwise known as “the 50 percent test.” OSHA estimated the cost of complying with PSM regulations at $2,100 per facility. However, the industry cost estimates per facility are $30,000 for initial compliance, $12,000 in recurring annual compliance costs and $18,000 for a three-year audit. Overall, this interpretation change could cost the industry more than $100 million to come into compliance. In fact, there are reports that some farm retailers are seriously considering consolidating facilities or getting out of the anhydrous ammonia business altogether. In December of 2015, in the Federal Omnibus Appropriations bill, Congress prohibited OSHA from enforcing PSM on farm retailers of NH3 until the agency had ran the change through the formal rule making process. Congress sent a message to OSHA directling the agency to withdraw its guidance memo, but the agency has indicated it is unwilling to follow the intent of Congress. In fact, OSHA has stated that it intends to enforce PSM on

farm retailers of NH3 beginning October 1, 2016, even before going through the formal rule making process. This March, KGFA joined NGFA and other national groups in requesting that House and Senate Appropriators include specific language in the FY 2017 federal appropriations bill requiring OSHA to withdraw the memo that ended this decades-long exemption for ag retailers, and prohibiting OSHA from enforcing PSM on ag retailers of NH3 in FY 2017, or any year thereafter, without going through the formal federal rule making process. In addition, KGFA contacted each member of the Kansas Congressional delegation and received confirmation that they would support a Congressional Ag coalition letter to the House and Senate Appropriations Committee members seeking inclusion of that specific language. This Congressional Ag coalition letter was sent to Appropriations Committee members on March 23rd. KGFA will continue to work with our national partners to push for inclusion of this language in the 2017 federal appropriations bill.

industry members understand the changes, requirements and appropriate exemptions included in the FSMA rules. The seminars will focus on the animal food rule and corresponding affected facilities. Each training session will cover FSMA major rules and implementation, and the new requirements for current good manufacturing practices (CGMPs) and preventive controls for animal food. The seminars will be administered by KGFA Director of Member Services, and NGFA Senior Vice President of Feed Services David Fairfield, and will feature

Matt Frederking of Ralco Nutrition. Mr. Frederking is an International HAACP Alliance Lead Instructor, and is also the current Chairman of NGFA’s Feed Manufacturing and Technology Committee. The seminars will be held at the following locations: on June 8th at the Sedgwick County Extension Center in Wichita, Kansas; and, on June 9th at the Kansas Department of Agriculture building in Manhattan, Kansas. Contact the KGFA office to register or to find more information on these events.

ernization Act (FSMA). The final rule’s requirements generally take effect one year following publication - or on or about April 6, 2017. The NGFA previously submitted extensive comments to FDA urging that it make significant changes to the proposed rule, which the agency issued in January 2014. Importantly, FDA’s final rule largely exempts rail carriers and truckers from the rule’s requirements unless the shipper and the carrier have

a written agreement (e.g., contractual agreements) making the carrier or another party responsible, in whole or in part, for sanitary conditions during the transportation operation. This written agreement also covers any obligation by the rail carrier or trucker to inform the shipper or receiver of the immediate previous load hauled in a conveyance, as well as information requested by the shipper regarding the most recent cleaning of bulk vehicles.

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BLUE RIBBON TASK FORCE

KGFA

Testifies Before Governor’s Blue Ribbon Funding Task Force on Water Resource Management

KGFA’s testimony before a state water resources task force advocated for full funding of the state water plan and offered a proposal to clean up nitrates in ground and surface water by increasing the size of the Kansas Agricultural Chemical Remediation program and other programs. On Tuesday, April 19, 2016, the Governor’s Blue Ribbon Funding Task Force on Water Resource Management met to receive public comment and testimony on funding proposals for the State Water Plan and the Governor’s Long-Term Vision for the Future of the Water Supply in Kansas. Members of the Task Force, to include Association President, Tom Tunnell, were appointed by the Governor to identify new funding streams and goals for the state’s water plan. The Task Force includes directors of ten state organizations, six Kansas Legislators, and four state agency heads. KGFA General Counsel, Randy Stookey, in testifying before the Task Force, stated that Kansas agribusiness industry members are experts in the handling, storage, and application of agricultural chemical and fertilizer products. Stookey expressed that the industry works with state agricultural producers, and state and federal regulators, to ensure the safe and efficient storage and use of fertilizers and ag chemicals in optimizing crop production in Kansas. Current funding mechanisms for the Kansas State

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BLUE RIBBON TASK FORCE failed to fully fund the SWPF in recent years. In fact, since state fiscal year 2009, the legislature has failed to transfer a total of $50.6 million from the state general fund. Additionally, since state fiscal year 2014, the legislature has failed to transfer a total of $7.2 million from EDIF into the SWPF. Had recent Kansas legislatures fully funded the SWPF from the SGF and the EDIF, as required by law, an additional $57.9 million would have been available for funding many of our water resource management needs. The Governor’s Long-Term Water Vision and the Blue Ribbon Task Force mission seeks to address issues of both water quantity and water quality. Similarly, state water plan programs target both water conservation and water quality, including, streambank stabilization and a new Water Quality Conservation Reserve Enhancement Program (CREP). The Boards of the KGFA and the Kansas Agribusiness Retailers Association have recently approved a proposal to address issues of water quality in our state, and ensure the future health of the Kansas Agricultural Remediation Reimbursement program which assists ag chemical and fertilizer facilities with the expense of removing pesticides and fertilizers in Kansas ground water and soil. The Ag Chemical Remediation Reimbursement Fund

Water Plan Fund (SWPF) include various user fees on the agribusiness industry and municipal water users. The original intent of the legislature, under the State Water Plan, was for all users of water in the state to contribute to the SWPF. As residents of the state, KGFA members contribute to the SWPF through the Water Protection fee and the Clean Drinking Water fee. Additionally, the agribusiness industry contributes the following ag industry-specific funds: $100 for each agricultural chemical product registered annually in the state, and $1.40 per ton on each fertilizer product that is sold in Kansas. In state fiscal year 2015, the fertilizer tonnage fee generated $3.39 million for the SWPF, and agricultural chemical product registration fees accounted for $1.28 million into the SWPF. By statute, $6.0 million is required to be transferred annually from the State General Fund (SGF) into the SWPF. An additional $2.0 million is required to be transferred into the SWPF annually from the Economic Development Initiatives Fund (EDIF). This total annual required transfer ($8.0 million) from the SGF and the EDIF reflects the legislative intent of a collective contribution for the common water resource management needs of our state. The funding needs for water resource management in our state continue to grow, however, the legislature has 11

(Remediation Fund) is 100% financed by annual assessments on commercial grain warehouses, custom fertilizer blender licensees, commercial fertilizer registrants, agricultural chemical registrants, and pesticide dealer fees. The Remediation Fund and program are essentially a form of self-insurance that provides a tremendous service to the Kansas agribusiness industry. Since 2001, the Remediation Fund has assisted in paying nearly $17 million in non-insurable remediation costs to ag chemical and fertilizer facilities across the state. However, this Remediation Fund is currently underfunded by around $4.5 million. The KGFA/KARA proposal would increase the fertilizer tonnage tax collected by our industry (currently $1.67/ton) by an additional 50 cents per ton. The additional fee would generate approximately $1.1 million annually. The additional funds would be used to enhance the Remediation Fund in order to meet the growing demand on the fund by our industry. KGFA feels this new fee on the fertilizer tonnage tax is appropriate, and necessary, as 90-95% of all new applications to the Remediation Fund are for remediation of nitrates in ground water and soil. Currently, fees on pesticide product registration and grain warehouse licenses account for close to 90% of the funds entering the program annually.

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In addition, a small percentage (15%) of the new funds may be utilized through the state water plan to assist with the newly passed water quality Conservation Reserve Enhancement Program (CREP). The goal of this program is to reduce nutrient load and sedimentation run-off in limited watershed areas directly above reservoirs in the state that are experiencing recurrent algae blooms. On Tuesday, Stookey submitted the proposal to members of the Blue Ribbon Task Force. The proposal would further the goals of the Governor’s water vision for water quality; enhance the ability of the ag chemical and fertilizer industry to perform remediation of ground water contamination from nitrates and other fertilizers; and reduce nutrient and sedimentation run-off in targeted watershed areas. The proposal directly addresses water quality concerns in our state, and demonstrates to state and federal regulators that the Kansas ag industry is ensuring best management and stewardship of Kansas waters.

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STATE-WIDE GRAIN TOUR WITH ATTORNEY GENERAL

NO TIES TOUR Association staff took advantage of the break between the regular legislative session and the veto session to visit members during one of our no ties tours. Thank you to our members who took time from their busy schedules to discuss industry issues, politics and about everything else!

KGFA Facilitates Statewide Grain Tour with the Attorney General In April, Attorney General, Derek Schmidt, contacted KGFA and asked if staff would assist in scheduling visits with our members across the state to discuss issues important to the industry. KGFA facilitated and participated in meetings with the General and our members. The meetings took place with Ag Partners in Hiawatha, Frontier Ag in Wakeeney, Alliance Ag and Grain in Wright, The Scoular Company in Downs, Farmway Coop in Lincoln and Danville Coop at their Newport location. During the meetings, the Attorney General heard from KGFA members about the federal

regulatory burdens facing the industry and shared with members what his office has done to slow the proliferation of such mandates. He explained how his office has entered into lawsuits against the federal government with regard to the EPA’s Waters of the United States proposed regulations, the lesser Prairie Chicken proposal and Clean Power Plan mandate. KGFA would like to thank the Attorney General for meeting with KGFA members and staff and participating in frank discussion on key agribusiness issues.

The Scoular Company, Downs. Pictured are Phil VanCourt, Tom Tunnell, Tyler Dishman, Glen Hofbauer, Ron Seeber, Doug Lantz, and Randy Stookey.

D.E. Bondurant Grain, Ness City. Pictured are Ron Seeber, Gary Gantz, Bob Gantz and Colby Gantz.

Nemaha County Coop: Pictured are Doug Biswell, Bobby Martin and Ron Seeber.

Pride Ag in Dodge City. Pictured are Ron Seeber and Jerald Kemmerer.

Morrill Elevator. Pictured are Ron Seeber and J.R. Isch SPRING 2016, GRAIN AND FEED REPORT

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Wind River Grain, Garden City. Pictured are Jodi Blackburn, Ron Seeber, Jeff Huggard and Charlie Sauerwein

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Kansas Grain and Feed Association 816 SW Tyler, Suite 100 Topeka, Kansas 66612

Underwriter $15,000+ KFSA Founder $7,500 KGIS Benefactor $5,000 ADM Companies Watco Companies Patron $3,500 BNSF Railway Company Bunge North America Cargill CHS, Inc. CoBank ACB Frisbie Construction Co., Inc. Hammel Scale Industrial Maintenance, Inc. Korol Financial Group LLC Union Pacific Railroad Bartlett Grain Company Beachner Grain Inc.

Builder $2,000 (cont’d) C-TEC, Inc. First National Bank of Hutchinson Frontier Ag Inc. Hannebaum Grain Co. Inc. Highlands Livestock Services INTRUST Bank KC Supply Co. Inc. Louis Dreyfus Commodities McPherson Concrete Storage Systems Morrill Elevator Inc. Offerle Coop Grain & Supply Co. Team Marketing Alliance The Cooperative Finance Association The Scoular Company Tri-States Grain Conditioning Inc. Donor $750 AgMark LLC Bank of the West BarnesCo Inc. CCS Group LLC Central States Fumigation Cline Wood Agency CoMark Grain Marketing, LLC

Donor $750 (cont’d) Cornerstone Ag LLC Drake, Inc. Equity Marketing Alliance Ernest-Spencer Farmers Coop Equity, Isabel Kansas Cooperative Council Midway Coop Assn. Irsik & Doll Feed Service Farmers Union Merc. & Shpg. Assn. Gamet Mfg. Inc. HABCO Hooker Equity Exchange Nemaha County Cooperative Pride Ag Resources The Ottawa Cooperative Assn. WindRiver Grain LLC Commodity Partners Kansas Soybean Commission Kansas Corn Kansas Wheat Kansas Grain Sorghum Commission Sorghum the Smart Choice

The Kansas Grain and Feed Report is published quarterly for the members, friends and affiliates of the Kansas Grain and Feed Association. Mail contributions to KGFA, Attention: Devon Stewart, 816 SW Tyler, Topeka, KS 66612 The KGFA team welcomes your comments, contributions and suggestions. Annual subscriptions for members can be purchased for $25. © 2016 KGFA

Spring 2016  

KGFA SPRING 2016

Spring 2016  

KGFA SPRING 2016

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