ECONOMIC REVITALIZATION
"Diversifying Kansas
Communities"
LIBERAL / ULYSSES
Wednesday, November 8 -- Scribe:
Barb Downey
The bus gathering KARL members from across the state for the beginning of
KARL Year II made its last stop in Sublette at 11 am Wednesday morning. With the
group very nearly complete, some cooler repacking was in order.
Having taken care of this immediate, pressing matter, the last joinees
updated the rest of the bus on "What I Did With My Summer." Jack showed his
"What I Did This Fall in Ghana" video. We were relieved to hear that none of the
advance party was struck with an incurable tropical disease, nor were any of the
party attacked by rabid monkeys. There was much catching up to do while the
group traveled from Sublette to Liberal’s Mid-America Air Museum for the first
stop of the Economic Revitalization Session.
Rozelle Webb of the Liberal Chamber of Commerce welcomed us to Liberal and
the Museum then updated us on current economic activity in the Liberal area,
which now includes the world’s largest single shed cotton warehouse for the
area’s burgeoning cotton-growing industry. The group enjoyed lunch and a brief
tour of the museum collections then gathered for two
presentations.
First on the docket was Dr. Jason Henderson, an assistant VP for the Federal
Reserve Bank of Kansas City, Omaha branch. Dr. Henderson first gave us an
overview of the general economic picture and his view of future trends for the
state. In general, job growth trends have lagged behind the rest of the US and
other states in the Midwest region. Oil & gas prices are the largest factor in
this trend, along with the softening housing market. Drought has also been a
factor, especially when one considers the importance of agriculture to the
state’s economy. The relatively long stretch of high cattle prices and the
improving grain markets are bright spots in this picture. Dr. Henderson
recognized the impact that ethanol production is having on grain markets,
pointing out that 1/3 of the US corn harvest will go to ethanol production,
which while good for grain markets, will have a negative effect on the feeding
industry.
Dr. Henderson next speculated where the new horizons might be for the Kansas
economy. One word: technology. Technology transforms industry and those
communities that support their entrepreneurs will greatly enhance the local
economy. He believes the future of Kansas lies in advanced manufacturing, value
added non-commodity food products and turning food into "non-food" items, like
energy and pharmaceuticals. Finally in the high-tech sector, Dr. Henderson sees
the life sciences field has a potential area for strong growth. He predicts by
2020, life sciences will account for 20% of the GDP.
One final area which Kansas is well positioned to exploit is the Recreation
and Natural Amenities industry. In 2001, people spend more on hunting,
fishing and wildlife activities that farming earned in gross receipts and about
the same as the gross livestock receipts. In addition, recreational demand for
land has surpassed investment demand in Kansas.
So what should be our strategies to position ourselves for this change?
1. Build regional
partnerships.
2. Tap cutting edge technology.
3. Lift worker skills; the
global economy is a knowledge economy.
4. Foster entrepreneurs.
5. Improve and leverage your
community’s quality of life.
Next, Ed Cross from the Kansas Independent Oil & Gas Producers addressed the
group. As Gary Haag has been trying to tell us (somewhat unsuccessfully), these
high oil prices do not automatically mean that everyone with an oil & gas
interest has been coining money.
Mr. Cross then discussed some interesting statistics. Shedding a little
different light on an oft-quoted statistic, he informed us that while the US
does indeed consume most of the world’s energy (25%), we use it to produce 30%
of the worlds GDP, making us much more efficient consumers of energy than a lot
of the world.
In discussing concerns of the independent producer, Mr. Cross stated that the
independents are perfect competitors (if you can call them that) for OPEC.
Because of OPEC’s oligopoly (An economic condition in which there are so few
suppliers of a particular product that one supplier’s actions can have a
significant impact on prices and on its competitors. I looked it up!) because
independents are price takers, not price makers. This statement sounded awfully
familiar to those of us in production agriculture. Thus, just like us, they are
really forced to watch their cost of production.
So, who are the other major players in the world energy market besides us?
China is number one. They are expected to account for 20-25% of the growth in
demand for energy in the next 5 years. If they were to consume energy like the
US, there’s not enough of it in the world, which should get everyone’s
attention. If that doesn’t grab you, our $1 trillion debt to China which gives
them a lot of leverage in our foreign policy should.
India can not compete with China, so they’re adopting an "if you can’t beat
‘em, join ‘em" attitude. As part of their national foreign policy agenda, they
have entered into an agreement with China which effectively makes them the
regions’ supplier of refined petroleum products.
The third big player on the world stage right now is Venezuela. Their current
policy effectively redirects oil formerly available for purchase by the US to
eastern markets instead.
These 3 players, along with OPEC are pushing Canada to the top our foreign
oil supplier list. Quality issues are a concern (Canadian crude doesn’t produce
as much gasoline/bbl and has a high sulfur content). In addition, Canadian oil
has oversupplied some local markets which has in turn hurt KS crude prices.
However, we must remember that Canada is a friendly supplier and we can’t afford
to shut them off to protect local markets.
The fact that world productive capacity is maxed out and world energy demands
are inelastic makes for very rapid and magnified price swings, which we’ve
indeed been experiencing.
Finally, Mr. Cross focused on specifics in the KS O&G industry. Oil & Gas is
very important to the KS economy in terms of tax revenue too. Taxation
contributed $230 million to the coffers in ’04 and $297 million in ’05. It
behooves us to keep it a healthy industry on a lot of levels. It is a sunrise
industry needing more workers, accountants, engineers, etc. KS need to make sure
there’s a competent workforce available. In addition, we need policy to enhance
access to the capital required to grow the industry.
We reboarded the bus and departed for the Southwest Medical Center in
Liberal. There Nancy Kletecka, Charles Hammonds, Carla Miller, Sandra Montez &
Linda Miller walked us through what it takes to keep a regional hospital
running, what the challenges are and what they’re doing to meet those
challenges. It was interesting to note that they are a county owned hospital and
do not depend on any tax dollars to operate. Yet. They are the 4th
largest employer in town and maintain a staff of 33 physicians.
After checking into the hotel at Liberal, the group departed for the recently
remodeled Liberal Depot for a delicious smoked rib-eye steak dinner sponsored by
US Premium Beef and KARL alumnus Nancy Honig and her husband Ron.
Following introductions of donor and alumni guests, Florence and Ted Metcalf
of Liberal announced an outstanding show of support for KARL.
Florence Metcalf, presented an agreement between the Ted
and Florence Metcalf family, the High Plains Heritage Foundation and KARL, Inc.,
that a $20,000 endowment gift was being made with earned funds from the
investment to be used specifically for the educational efforts of the Kansas
Agriculture and Rural Leadership Program.
Florence Metcalf served as the first curriculum committee chair of the board
of directors for the KARL Program said our director Jack Lindquist, President of
the private non-profit educational organization. Jack said, "We can’t express
our appreciation enough for the vision Florence Metcalf had by providing a
framework of unmatched educational experiences for future agricultural and rural
Kansas leaders. Her gift is a model for other successful rural leaders to extend
their legacy to the benefit of emerging leaders."
Brian Bertleson, Director of Field Operations for US Premium Beef delivered a
presentation afterwards. This scribe experienced a brief moment of panic seeing
no notes about this event in her notebook. Fortunately, said scribe remembered
she’d used her PDA and a potential extrapolatory event was averted.
Mr. Bertleson outlined what he believed made USPB successful when several
other similar start ups weren’t. Next he reviewed facilities, the primary one
being National Beef, the nation’s 4th largest beef processor. USPB,
which is owned by 1900 member/producers, pays for member cattle based on carcass
merit, with the top 25% of the cattle returning $56/head premium over the cash
market, while returning complete carcass data on all cattle. USPB is pursuing
value-added markets, like supplying age verified cattle to Japan. In addition,
they own 2 case ready packaging plants which supply some of the beef to Wal-Mart
along with a steak cutting company supplying the restaurant trade and high-end
direct to consumer markets. Finally, USPB is entering the so-called "Natural"
beef market with 2 products: a never-ever product, meaning that the animal has
never received antibiotics or exogenous hormones, and their Naturewell line,
which means no antibiotics or exogenous hormones for the last 120 days of the
finishing phase. Both markets are still small but growing all the time.
The group returned to the hotel for executive session, which included
discussing packing, photo tips and travel plans for our international seminar to
Ghana. Thank goodness the coolers had been repacked earlier, as demand for juice
products was nil, while the cereal malt beverages were strong movers.
Thursday, November 9, 2006
-- Scribe: Alan Cobb
The day began with a beautiful Kansas sunrise. The orange and yellow streams
across the horizon greeted KARL Class VIII warmly as we awoke at the Days Inn in
Liberal. The air was clean and crisp and portended a wonderful and productive
day.
After treating classmate Jeff Reinert for mild
injuries suffered in a battle with a plate glass window, we boarded the bus and
were off for Hugoton by 6:47 a.m.
We were met at Hugoton USD #210 by KARL class VI
member Nancy Honig, an extension agent in town.
We were treated to a wonderful breakfast of biscuits and gravy, sausage,
eggs, pancakes, grape juice and coffee.
Mr. Ron Keller, the Principal and the Middle School welcomed us to USD 210
along with the Athletic Director, Scott Schechter.
We proceeded to the auditorium for brief comments by the Superintendent, Dr.
David Self. Dr. Self noted that within a 100-mile radius, there are more than 5
million head of beef and pork.
"How will Kansas survive the shift?" "Will we only be as healthy as the
Ogallala Aquifer?"
"With demographic changes," Dr. Self remarked, "we have to market our schools
differently with distance learning and technology."
The old thoughts were that only urban areas saw demographic change. Looking
at Southwest Kansas, that is clearly not the case, Dr. Self stated. One example
of their school district changing is hiring teachers from India, when they could
not find appropriate personnel in the U.S.
Rolla, Moscow and Hugoton may not be able to each hire chemistry and physics
teachers, but collectively, they can.
One of the drivers of educational change is the shift to mandatory attendance
and optional learning.
He left us with the warning, "If you don’t change, you won’t exist."
After Dr. Self’s comments, we viewed a provocative PowerPoint presentation,
"Shift Happens" set to the soundtrack of "Last of the Mohicans."
Highlights from the PowerPoint:
- The 25% of the population in China with the
highest IQ’s . . . Is greater than the total population of North America.
- The top 10 in-demand jobs in 2010 didn’t exist in 2004.
- 1 out of every 8 couples married in the U.S. last year met online.
- There are about 540,000 words in the English language . . . About 5 times
as many as during Shakespeare’s time.
- It’s estimated that a week’s worth of New York Times . . . Contains
more information than a person was likely to come across in a lifetime in the
18th century.
On our way to our next stop at the school, we were able to longingly gaze
upon Don Beesley’s senior picture when his hair was .
. . thicker.
Science teacher Mrs. Ferguson then hosted our class in the science lab where
we observed students participating in science experiments and other educational
activities on desktop computers. Some of the topics of the modules included
Lego robot building, the periodic table of elements, soils, cell structure,
astronomy, ecology, body systems, forensics, rocket science and genetics.
The computer exercises were interesting, but some of us wondered how progress
was measured and how this type of learning compared to the more traditional
method of lecture and test.
Our next stop was the school’s media center, where we were greeted by
a reformed truck driver who learned television media
on-the-job. Currently they have cafeteria menus and school schedules on the
local cable TV systems and on the web.
Their goal is to add a "green screen" where they can tape interactive
interviews with coaches and teachers, add student news and other school-produced
programming.
We visited a video editing class and watched a student-produced video about
the U.S. spy plan accident with a Chinese aircraft and the ensuing hubbub. It
was a well-done piece, done using Casa Blanca software.
Though impressive, technology is not the only focus of USD 210. We learned
from Mrs. Winnie Hegehah about the Read 180 program. This assists students who
are having difficulty with reading and actively engages their mind and keeps
track of books read and the number of words read. Their goal is 100,000 words
read by the end of the year. It is a tangible goal that gives students something
to shoot for. Among the reading lists is Romeo and Juliet and other
classics, many of which I have seen my KARL classmates reading.
The Elementary school was our next stop. We were met by Tiffany Boxum,
the intermediate principal. Grades K – 6 are housed at the elementary schools,
but there are two principals. One for preschool – 2 and a principal for grades 3
– 6.
They use extensive testing to track student progress, though Ms. Boxum noted
that they do not use test results to change teaching methods.
The students say the Pledge of Allegiance every day.
We met the new teacher from India that Dr. Self mentioned earlier in the day.
Ms. Boxum had "taken her under her wing" to help her with housing and navigating
the new culture. The teacher was very energetic and pleased to be in Kansas.
While we viewed an igloo made of 256 mile jugs, Don Beesley
was able to get a quick hug from his lovely daughter.
We were also able to visit with a 1st grade teacher, who happened
to be Don Beesley’s 5th grade teacher.
Responding to Hallie’s question about how Don was as a student, she replied,
"Ask him about Mexico." Don?
She thought the major differences in teaching that she’s witnessed in her
years are the additional resources available for troubled students and the
increase in helpful technology.
English as a second language remains a challenge for the entire school
district. They have one ESL teacher, but need more. They also provide ESL
training to adults in their community.
One new change has been the arrival of German Mennonites form Mexico. Their
school counselor actually speaks Low German and has been able to translate.
Then we were back on the bus.
We drove through a Seaboard feed mill near town, but since Stevens County
does not allow corporate-owned swine facilities, we ventured into Morton County
and stopped at a weaned-pig finishing unit.
We were treated to an unbelievably good lunch of pork loin and pork ribs at
the Seaboard facility near Rolla. Matt Johnson, KARL Class VII member, made a
presentation on the history and current status of Seaboard, Inc. Among other
things we learned were that 30% of their high-end pork cuts are exported to
Japan. We also learned that 4 boars produce 27,000 semen specimens every four
days.
We each were given a package of Seaboard bacon which I can attest to the
excellent taste.
We slowly boarded the bus to Johnson, looking forward to a few winks on a
full stomach.
At the Johnson Senior Center, Mel Winger gave us an oral history of
irrigation in Southwest Kansas. Mr. Winger’s grandfather first drilled an
irrigation well in 1939 and pumped the water with a John Deere tractor. The
water was pumped into a pond during the evening and was used on the crops during
the day.
Flood irrigation was the primary method until the last 1960s when sprinklers
appeared.
Wells are as deep as 600 feet and cost $3-$4 a foot to drill. Since much of
the aquifer is declining, some are talking about piping water from Canada or the
ocean to Southwest Kansas since the infrastructure is already in place for the
agriculture supported by irrigation.
We then split into group discussion with other area farmers.
Clearly the future of irrigation and its impact is a significant concern to
area residents. There are no easy answers and the debate has only begun.
Next at the Johnson Senior Center was Terryl Spiker, from the First National
Bank in Syracuse. Terryl grew up in Syracuse and has
become concerned about the population loss. He decided to get together with
other area leaders to take an inventory of their areas assets and decided to
recruit a corporate dairy. Hamilton County is now the #1 dairy county in Kansas
with 50,l00 cows and 5 dairies. "That just doesn’t happen on its own," Spiker
told us.
We met one of Spiker’s recruits who has started a successful large-scale
dairy nearby. Dan Senestraro, moved to Syracuse from California in 1994 and
doesn’t plan on leaving. He’s gone from zero to producing 5 million pounds of
milk per day.
The quick changes, Senestraro said, have created
political, administrative and government regulatory problems. He expects these
problems and others problems, such as adding more dairy processing,
to get better over the next decade as the High Plains of the U.S. continues to
be the growth area for dairies.
Processing will go where the mile is. Southwest Kansas has many feed choices,
which make it ideal compared to the traditional dairy areas of the upper
Midwest, which have more limited options.
Terry and Dan both were optimistic about the future. "It’s still about cheap
land."
We then made our way back to the bus for another nap while we moseyed down
the highway to Ulysses, home of not the Double Tree Inn, but the Single Tree
Inn.
We checked into our rooms, gussied ourselves up for the evening and crossed
the highway to the Corporate Offices of Pioneer Electric Cooperative.
Our dinner speaker was Lance Woodbury, KARL Class VI member. The topic was
conflict management for community leaders. Lance provided wonderfully pertinent
information as our class discussed real Kansas conflicts such as corporate hog
farms, the Phelps family, a new competing hospital in Colby and corporate tax
subsidies.
We finished our very long day with a visit to the very impressive Grant
County Historical museum.
Friday, November 10 --
Scribe: Verle Carlson
The third day of the first seminar of year two for KARL Class VIII began with
a continental breakfast at the Single Tree Inn in Ulysses Kansas. The seminar
topic of Economic Revitalization was continued discussing Water Quantity /
Irrigation Issues. Four speakers addressed the Class and a panel discussion
concluded the half-day session.
Our first speaker was Brownie Wilson who has been with the Kansas Geological
Survey state office in Lawrence in the Geohydrology Section since 2001. He is
manager of the Hydrologic Date / GIS Survey.
Mr. Wilson described the topography and structure of the High Plains Aquifer,
which runs from Montana to the panhandle of Texas. Three parts of the High
Plains Aquifer are found with the Kansas border: the Ogallala Aquifer, which
covers the western third of Kansas, the Great Bend Aquifer found in Central
Kansas, and the Equus Beds located just to the east of the Great Bend Aquifer.
His discussion centered around the decline in the water table level.
http://hercules.kgs.ku.edu/geohydro/bwilson/karl2006/karl2006.htm
Mr. Wilson pointed out that the water table level in the Ogallala Aquifer has
dropped approximately ten feet in the last ten years. The major reason for this
decline is usage, with the drought conditions being a second reason. Using the
Palmer Drought Indices, he showed how we may expect another five years of
subnormal rainfall. He pointed out that groundwater declines are slowing but the
drought conditions may accentuate the water table decline. He called it unlikely
we will ever run out of water in the Ogallala Aquifer, but its volume could
significantly decline.
David Brenn was the second speaker of the morning. He is President of the
Kansas Water Congress with offices in Garden City and Topeka. He is also a
member of the Kansas Water Authority, representing Ground Management Districts
1, 3, and 4.
Mr. Brenn explained the purpose of the Kansas Water Congress is to protect,
conserve, and manage Kansas water resources and to develop resources for the
future. He also stated that water problems will not be cured with great science
or regulations, but has to be based on voluntary control. He explained that we
as a society are willing to fund conservation as evidenced by the fact that we
use less as it costs more.
Steve Irsik was the next speaker in the morning’s program. Mr. Irsik is a
farmer, rancher, and businessman near Garden City and serves as Chair of the
Kansas Water Authority, which serves as an advisory to the Governor and the
Legislature.
Managing natural resources has nothing to do with politics, but has to do
with the next one hundred years and more claimed Mr. Irsik. He explained how the
Great Bend Aquifer may be sustainable for the long term, but that the Ogallala
Aquifer may not be. He then introduced us to the idea of the Conservation
Reserved Enhancement Program (CREP). CREP is a voluntary program where specific
designated areas have their irrigation water rites permanently retired, with
payments to owners over a period of years.
Our fourth speaker for the morning was Jay Garetson, a farmer and
agribusinessman from the Copeland Kansas area. Jay is a KARL Class V graduate
and with his brother and father have a diversified irrigated and dryland
operation. Jay has been involved in water issues on many levels including the
Ogallala Management Task Force and currently serves on the Governor’s advisory
State Board of Agriculture.
Mr. Garetson said that a voluntary incentive-based program may be good but
that the most important point is the need for a total western Kansas buy-in for
a conservation program, not just for some in a specific area. His concern and
passion for the water issue in Western Kansas was evident and strong.
A panel discussion followed answering questions from KARL Class VIII. Many
ideas and issues were discussed, and very few agreed upon, but it became very
evident that the Water Quantity / Irrigation Issues of Western Kansas is a major
concern and a problem that has no easy answer.
Each KARL Class VIII member then gave their Seminar Feedback Reports and
evaluations were filled out and turned in. Lunch was sponsored by Donnie Young
Farms. It was all aboard the charter bus and lively discussions on a variety of
topics occurred on the return trip back home.
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