Master of Agribusiness / Department of Agricultural Economics / Michael W. Woolverton / A business plan serves two main functions: One is to provide a set of guidelines and expectations for running the business and the other would be to request funding from either a traditional or non-traditional lending source. Most business plans consist of the executive summary, business description, market analyses, management team, operations, and financial projections. Stephenson Enterprises is in the process of obtaining funding for a start-up business that will manufacture a biodegradable low cost substitute loose-fill packaging material. Due to the relatively high cost of this start-up, external funding is necessary. The first choice is to approach a large bank with the business plan, secondary choices if necessary would include smaller banks. The third choice would be alternative funding such as nonprofit organizations that provide start-up funding, however many of these are limited in the amount they lend. In order to garner funding for this entrepreneurship, it was decided that a business plan was needed. A business plan has two primary functions. One function is to set forth some guidelines as to how a firm is operated as well as what is projected. The second, and perhaps most often the reason a business plan is developed is to secure funding from a financial institution. Within the business plan a myriad of financial data was gathered to include: financial analysis, financial projections, cash flow, balance sheet, break-even analysis, sales proforma, income statements and sensitivity analyses. In addition to the financial data, a market analysis was conducted to provide insight into the local market. This business plan will not only provide an estimate of financials but will also serve as a guide book for operating the business.

Master of Science / Department of Agricultural Economics / Christine Wilson / Allen Featherstone / The objectives of this thesis are to examine the banking strategy of Kansas farmers and to analyze the determinants of lender choice among Kansas farmers. To meet these objectives, econometric analysis was used to examine the financial characteristics of the farm that affect the number of banking relationships and the probability a farmer has a loan with a respective lender. The financial characteristics include variables representing the solvency, liquidity, and profitability of the farm. To analyze banking strategy, a poisson model was estimated to determine how the financial characteristics of the farm affect the number of banking relationships used by the farmer. The solvency, liquidity, and profitability of a farmer was analyzed to examine how these measures affect how many banking relationships the respective farmer has. Additionally, a panel data fixed effects model was used to analyze how the number of banking relationships affects the net farm income of the farm. To analyze the determinants of lender choice for Kansas farmers, six probit models were used to determine how farm and financial characteristics, including dollar amount of inventory for certain assets and dollar amount of loans, affect the probabililty the farmer has a loan with the respective lender. A Heckman selection model was used to further analyze the dollar amount of loans a farmer has with a respective lender using information from the probit models. Results of the study show that the higher the debt to asset ratio the farmer has, the more banking relationships the respective farmer has. It was also found that the amount of inventory for certain asset classifications, dollar amount loans, and the financial characteristics affect the lender the farmer chooses to use.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The purpose of this research was to develop a decision tool to identify and rank potential locations for making a greenfield investment in flour milling. The driving characteristics of the tool developed are transparency, reproducibility, specificity and clarity. Currently, the approach to selecting countries in which to invest is driven purely by ad hoc frameworks that often lack the characteristics driving this investment index tool. The investment index was designed to have three main components: market conditions, economic environment and supporting infrastructure. Market conditions for the product of interest – in this case flour – were defined to encompass per capita wheat-based food consumption growth rate, wheat production versus wheat consumption and wheat flour imports growth rate. The economic environment was defined to incorporate the growth rate of per capita gross domestic product, corporate tax rate , labor productivity, foreign direct investment growth rates, position on the World Bank’s Doing Business 2012 rankings, and the number and extent of the country’s membership in regional economic and trade groups. Supporting infrastructure included electricity reliability, transportation quality, urbanization rate and the physical presence of the investing company in the country. The rationale for this last variable is that when the investing company already has a presence in the country under consideration, it has already incurred some of the hurdle costs that it would have to include in investments in a location where it does have current physical activities. The study started by filtering the scope of potential opportunities by a set of well-defined criteria: target geographical locations; Doing Business 2012 scores; and quantity of wheat flour imports in 2009. This led to four countries emerging as leading candidates for investment considerations: Brazil, Malaysia, Indonesia and Thailand. The investment index ranked these countries according to their relative suitability for investment. The three components of the index carry different weights because of their effect on the potential investment outcome. There is no data to support these weighting and therefore executives must utilize different probing approaches to weight the components. To this end, a base scenario and two other scenarios based on alternative weights were considered. The robustness of the ranking is revealed by the consistency of the rankings under the alternative weights applied to the components. The results showed that under the base scenario Malaysia had the highest investment index score. The results also showed that varying the alternative weights for the scenarios did not affect the overall outcome with Malaysia leading with the highest overall index score for each of the three scenarios.

Master of Science / Department of Agricultural Economics / Andrew Barkley / This study examines the effect of extreme climatic conditions (drought, flood, and bushfires) on the livelihood of households in the Bawku West district of Ghana. The research identified the mechanisms with which households cope in such situations, and analyzed factors influencing the adoption of coping strategies for flood, coping strategies for drought, and coping strategies for bushfires. Data for the study were collected in selected villages across the district in the aftermath of the 2007/2008 extreme climatic events (a prolonged drought period followed by an erratic rainfall). A binary logit regression (BLR) model was then specified to estimate factors that influence the adoption of a given coping mechanisms. Results from the BLR model indicate that literacy level, membership with an FBO, household income, and location of households had positive and significant impacts on adaptation to drought. Similarly, source of seeds for planting, membership with an FBO, household income, and farm size had positive significant influence on adaptation to flood. Adaption to bushfire was positively influenced by radio ownership, seed source and income. The main effect of these climatic extreme events on households included destruction of crops, livestock and buildings; food and water shortage; poor yield or harvest and limited fields for livestock grazing. Therefore, government policies should be geared towards creating revenue generating channels and in strengthening institutions that provide access to farm credit, readily available improve seeds and extension. Additionally, policies that expedite information dissemination through radio and other public media will enhance households’ adaptive capacity.

Doctor of Philosophy / Department of Agricultural Economics / Jason S. Bergtold / The adoption of new technologies on-farm is affected by socio-economic, risk management behavior, and market factors. The adoption of cellulosic biofuel feedstock enterprises and conservation practices plays an important role in the future of Kansas agriculture. No set markets currently exist for bioenergy feedstocks and farmers may be reluctant to produce the feedstocks without contracts to mitigate uncertainty and risk. Adoption of conservation practices to improve soil productivity and health may be affected by risk considerations also. The purpose of this dissertation is to study how market mechanisms and risk influence Kansas farmers’ willingness to adopt cellulosic biofuel feedstock enterprises and conservation practices on-farm. The first essay examines farmers’ willingness to grow switchgrass under contract using a stated choice approach. Data were collected using an enumerated survey of Kansas farmers and analyzed using latent class logistic regression models. Farmers whose primary enterprise is livestock are less inclined to grow switchgrass. In addition, shorter contracts, greater harvest flexibility, crop insurance, and cost-share assistance increase the likelihood farmers will grow switchgrass. The second essay examines how farmers’ risk perceptions impact conservation practice adoption. Factor analysis of survey data was used to identify primary risk management behaviors of Kansas farmers. A multinomial logit model of conservation practice adoption incorporating these risk behaviors was developed. Estimation results indicate that different risk management factors may have no significant impact on practice adoption. Farmers may not consider certain aspects of risk significant in their adoption decision. The third essay examines the effect of different risk management behaviors on farmers’ willingness to produce alternative cellulosic bioenergy feedstocks under contract. Data were collected using a farmer survey with a set of stated choice experiments and analyzed using factor analysis and latent class logistic regression models. While farmers approach risk management differently, the risk management behaviors identified have no significant impact on farmers’ willingness to produce corn stover and switchgrass but have a negative impact on farmers’ willingness to produce sweet sorghum as a biofuel feedstock. These results may indicate that farmers are indifferent toward adopting new bioenergy cropping enterprises when traditional crop production is profitable and more certain.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The objective of the research is to understand the volatility of cotton acres and estimate planted acres based on the factors that drive volatility in the United States at a regional level. Estimating cotton acres is important so that demand for cotton seed and technology can be anticipated and the appropriate investments in cotton seed production can be made. Post Multi-Fiber Arrangement, the US cotton economy has entered a state of imperfect completion which makes cotton price, ending stocks and the relationship of cotton to other crops important in understanding volatility in cotton acres. Linear Regression, Random Forest and Partial Least Squares Neural Networks (PLS NN) were used to estimate cotton acres at a US and Regional Level. The modeling approaches used to estimate change in acres yielded similar performance for U.S. total, Southwest, and West. The PLS NN was slightly better for the Delta and Southeast, where more crop alternatives exist. Random Forest offered a different perspective on variable importance in all regions.

Master of Agribusiness / Department of Agricultural Economics / Bryan Schurle / Frito-Lay is part of the PepsiCo Family which makes some of the best known and top selling snack foods around. Frito-Lay is the dominant player in the salty snack category in the United States, with a 65 percent share of the market. Frito-Lay brands include Lay's, Ruffles, Tostitos, Sunchips, Fritos, Cheetos, and Doritos. The objective of the thesis is to analyze a potential project: installing a raw potato sorting system on a potato chip line. Part of the analysis will be to conduct a net present value analysis of the costs and benefits associated with the project. Currently the line runs with one full time employee that inspects the raw incoming potatoes for foreign matter and color. Recently, technology options are available that the company could add to the raw potato sorting function that could potentially reduce employee labor costs. This research project provides information regarding the system’s investment cost, maintenance requirements, labor savings, and finished product quality impact. As the business environment changes businesses must keep up with rapidly changing technology to be able to compete. A company that is able to compete will be able to survive in the market and sustain profitability. Capital expenditures need to be evaluated and adopted if they keep a company competitive or make a company more cost efficient. The analysis concluded that the investment of installing a raw potato sorting system would be profitable, earning a positive NPV and internal rate of return greater than Frito-lay’s cost of capital. I would recommend that Frito-Lay move forward with this investment.

Master of Agribusiness / Department of Agricultural Economics / Mykel Taylor / The agricultural commodity market has been experiencing previously unseen high prices in recent years. This new era of prices brings with it new challenges within agriculture for farmers and grain buyers within agriculture. This research explores the basis values of hard red winter wheat in Kansas and the elevator characteristics that provide a competitive advantage for elevators buying wheat in Kansas. This research explores hard red winter wheat basis values from elevators located around Kansas from 2002 to 2013. Two hundred twenty eight locations from around Kansas were used in the research. These locations provided the price data that was used for this research. The elevator characteristics used in the research were collected from the Kansas Grain and Feed Directory and the Burlington Northern-Santa Fe and Union Pacific railway companies. Five elevator characteristics were researched that may have a significant impact on an elevators basis. These characteristics are thought to provide a competitive advantage to the location in the form of stronger or narrower basis bids to the farmer, giving the farmer a higher price for his grain. The characteristics researched included elevator capacity, transportation capabilities, elevator terminal status, shuttle loading status, and cooperative or investor-owned business structure. Each characteristic was compared against their counterpart. For example, a location is either a shuttle loader or it is not. The research provides grain companies and farmers some data that they may find useful in marketing grain and setting basis levels in the ever changing and volatile market place in today’s grain industry.

Master of Science / Department of Agricultural Economics / Jeffery Williams / Ethanol has become an important source of energy for transportation purposes in the U.S. The majority of the feedstock for this ethanol is corn grain. The use of crop residues and perennial grasses has been proposed as an alternative feedstock for ethanol production using cellulosic conversion processes. Commercial scale production of cellulosic ethanol is still on the horizon. In the meantime a wide variety of studies examining both the technical and economic feasibility of cellulosic ethanol production have been conducted. This is the first study that combines both county level cellulosic feedstock production and farmer participation rates to determine the feasibility of supplying it to cellulosic ethanol plants. This research determines the economic feasibility of supplying cellulosic feedstocks to seven potential add-on cellulosic ethanol plants of 25 million gallons per year at seven existing starch ethanol plants in Kansas. The feedstocks considered are corn stover, sorghum stalks, wheat straw, and perennial switchgrass. A mixed integer programing model determines the amount and mix of cellulosic feedstocks that can be delivered to these plants over a range of plant-gate feedstock prices given transportation costs and farm-gate production costs or breakeven prices. The variable costs of shipping are subtracted from the difference between plant-gate price and farm-gate price to find savings to the plant. The objective function of the model minimizes transportation costs which in turn maximizes savings to the plant. The role switchgrass may have as a feedstock given various switchgrass production subsidies is examined. The results indicate the minimum plant-gate price that must be paid to feedstock producers for all plants to have enough cellulosic feedstocks is $75 per dry ton. Switchgrass feedstocks were only a minor portion of biomass supplied and used without a production subsidy. A Biomass Crop Assistance Program payment increased the supply of switchgrass more than other production subsidies.

Master of Agribusiness / Department of Agricultural Economics / Mykel Taylor / Agriculture subsidization policies have a long history and have been criticized, reformed and heavily discussed multiple times over the last centuries. However, most countries in the world use farm subsidies as a policy instrument and spend billions every year. Especially highly developed and wealthy countries seem to have a tendency to subsidize production agriculture and the agricultural industry. The objective of this thesis is to improve understanding of the impact direct payments or subsidies may have on farm land values via farmers paying higher dollars for ground they rent and capitalization of those higher rents. Analysis is done by comparing the allocation of subsidy dollars from the Common Agricultural Policy on two wheat farms in Germany and Czech Republic, which are member countries of the European Union, to wheat farms in the United States and Australia, countries with relatively lower subsidy levels. Data for the farms include their cost structures, total revenues, and total direct payments. Comparisons of their relative land values and rental rates paid will provide evidence to test the hypothesis that direct subsidies are likely to increase land values. Based on the economic costs of production for the farms in Germany and Czech Republic, the value of land is not necessarily the residual claimant for the direct payments paid out through Europe’s Common Agricultural Policy. Possible explanations for this include restrictions on farmland use and farmland ownership structures held over in former communist countries where farms were owned by the state. These factors are likely to affect potential farmland owners’ perceptions of property rights and their willingness to pay a full market value for land.