News

January 26, 2015 | Business Lexington

The Kentucky Agricultural Development Board (KADB) capped off a record year of investment in December with some sizable investments for state agriculture programs and initiatives.

Counting the more than $10 million doled out at the group’s last meeting of 2014, KADB sent more than $43 million of Kentucky Agricultural Development Funds (KADF) to state agriculture projects last year. The December disbursement went to 48 agricultural diversification and rural development programs and projects, according to information from the Governor’s Office of Agricultural Policy (GOAP). That agency serves as the administrative arm of the KADB, which oversees the fund.

The latest projects approved show the direct impact of the KADF and its widespread reach across the Commonwealth, said Governor Steve Beshear, who chairs the board.

“Over the past 14 years, every county in Kentucky has benefited in some way by the Kentucky Agricultural Development Fund,” he said.

December’s meeting included the announcement of some big-ticket programs, including: a total allocation of $3,490,000 in state funds for 2015 and 2016 to fund the Kentucky Proud Program; $2,108,500 for the Kentucky Dairy Development Council; $1,869,016 for the Kentucky Beef Network, LLC; and $1,300,000 to the Kentucky Horticulture Council, Inc.

Joel Neaveill, GOAP chief of staff , said the investments from the KADF have been used for a variety of projects, as was indicative of the December meeting.

“This is symbolic of the kind of great success and the amount of funds that have been committed throughout the year,” he said.

One of the largest investments of the year, at $7.5 million, went to the Agriculture Finance Corp., a loan program that provides funds to beginning farmers and for on-farm infrastructure. Total assets for that program amount to approximately $43 million in the loan pool.

“Should the KADF end, that loan program will continue on, as long as everybody continues to make their payments and we’re making good loans,” said Neaveill.

These investments made over the past decade and a half have made Kentucky a model for other states that also receive funding from the Master Settlement Agreement (MSA), the origin of the KADF. The Ag Development Board was created by statute in 2000 and reinvests 50 percent of those MSA funds to state agriculture. Many credit that structure as the major factor in creating a strong ag sector, as evidenced during the last recession, when Kentucky’s ag industry was one of the few that flourished.

Neaveill said there is a high level of accountability in place for the fund, including a legislative oversight committee that reviews all board decisions.

“I think there is accountability built throughout the process that provides a lot of credibility,” he said. “It’s always a work in progress, and we’re always looking for continuous improvement. I think we’re really pleased with the progress that’s been made but still see a lot of demand for the investments in the programs.”

A study was conducted by the University of Kentucky to evaluate the KADF between the years of 2001 and 2007. That study found that, “on average, every dollar invested from the KADF in non-model projects resulted in $1.87 of additional farm income.”

Neaveill said another such study is in the works to review the degree of impact the KADF investments have made on the state’s agriculture sector from 2007 to 2014.

“It’s always important to reflect back on the work that you’ve done so you develop a roadmap for the future,” he said.

Neaveill said he expects the findings of this second study to be just as positive, in part because of the fine-tuning of processes and procedures that have been a part of the KADF. In addition to the larger, often very visible investments made through state funds, the KADF also has been beneficial to smaller, more localized projects through county funds.

“This December meeting, I think, represents all the KADF was created for, including the county level through county councils,” he said.

Recent county-fund investments included projects with greenhouses, 4-H ham curing sheds, and statewide on-farm energy investments, as well as support for regional farmers’ markets.

While those in the ag industry are familiar with the KADF and what it has meant to Kentucky agriculture, Neaveill said he thinks those outside of agriculture are less aware of the fund’s far-reaching effects.

To learn more about the KADF and the investments made, go to http://agpolicy.ky.gov.

– See more at: http://bizlex.com/2015/01/kentucky-ag-development-board-makes-record-investments-in-2014/2/#sthash.snIoF52P.dpuf

January 4, 2015 | Central KY News

FRANKFORT — Kentucky beekeepers of all ages and skill levels may learn the basics or sharpen their skills at 10 beekeeping schools across the Commonwealth during January through March.

“Beekeeping is very important to agriculture in Kentucky, throughout the United States, and around the world,” Agriculture Commissioner James Comer said. “Honey bees are responsible for pollinating 30 percent of our food supply and 70 percent of all wildflowers. Sales of honey brought in an estimated $811,000 to Kentucky honey producers in 2012. The Kentucky Department of Agriculture is dedicated to supporting Kentucky’s beekeepers and encouraging more people to enter this vital and fascinating field.”

December 3, 2014 | Civil Eats

A 24-acre site formerly occupied by the National Tobacco Company will soon become home to a local food hub in Louisville, Kentucky.

While Louisville has emerged as a new foodie destination in the past few years, this project is aimed more at supporting small farmers—and building a local food economy—than serving artisan sandwiches. But there will likely be plenty of those too.

The hub is envisioned as a marketplace where farmers would be able to monetize their entire crop. Local produce will first to go to restaurant and market buyers within the hub. What doesn’t sell that way–-the “seconds”–will go to an industrial food processor located next door. What’s left–-the “thirds”–will go to a food bank in the hub. And whatever cannot be eaten will go to an anerobic biodigester producing methane and heat from organic waste.

Food hubs, or networks that allow regional growers to collaborate on marketing and distribution, are growing in popularity around the nation, thanks in part to support from the U.S. Department of Agriculture. But this one takes the model further. The vision is to have a mix of tenants representing the entire food cycle. There will also be a two-acre demonstration farm operated by the county agriculture extension service.

The product of a partnership between city government and Seed Capital Kentucky, a non-profit investor, the West Louisville Food Hub is intended to bolster the local food economy by filling current gaps in distribution and aggregation. Those needs became all the more pressing with the closure of the previous local food distributor, Grasshoppers Distribution, last year.

Stephen Reily, Seed Capital KY’s founder, characterizes the planned hub as “an industrial site that works like a farm.” By co-locating a food processor, a juicery, a bio-digester, and a farm, he hopes to resolve bottlenecks in the supply chain, foster economies of scale, and create a one-stop-shop for both local food producers and buyers.

“There are too many one-to-one transactions today,” says Reily. “If a chef wants to order from Sysco that’s one transaction, versus calling up 18 different farmers.”

The impetus behind the hub came in part from Louisville Mayor Greg Fischer’s 2013 initiative, Vision Louisville, which identified both a food hub and an energy plant using waste as community priorities. But Reily himself saw “a lot of unconnected dots between local food and local people.” Connecting them meant not only fixing current problems, but transforming Louisville’s food economy. “The more we looked at it, the bigger it got,” adds Reily.

The project is ambitious in scope as well as size. The site itself, in West Louisville, is larger than the infield of the Churchill Downs racetrack. Yet the neighborhood is worlds away from the roses and mint juleps of the Kentucky Derby. Although it’s a single-family residential area where houses have yards, it is also the most economically depressed part of the city. Reily estimates that 90 percent of neighborhood children receive free or subsidized school lunches, and the unemployment rate is the highest in the county.

Like urban farming initiatives in other cities, civic leaders are looking to the food hub for urban renewal. “I’ve heard estimates of up to 275 construction jobs for phase one, and 250 permanent jobs,” says Councilwoman Cheri Bryant Hamilton, whose district includes two of the three neighborhoods that border the food hub site. “But even one job would be positive in this environment.”

Outside of providing jobs, question remain about how to make such a large-scale venture “fit” into the community. Potential tenants, which include a commercial kitchen incubator and indoor hydroponics and aeroponics companies, have expressed interest in making their facilities accessible to the public.

But Valerie Magnuson, executive director of Louisville Grows, a nonprofit that maintains several community gardens and a grower’s co-op in West Louisville, is skeptical of the project as an outside initiative. “We’ll continue to hold them accountable, and see if they’re able to listen to the people in the neighborhood,” she says.

While the idea of a food hub may be relatively novel, Louisville itself has long been a hub for other kinds of commerce. Located at the falls of the Ohio River, the city was a busy shipping port into the 20th Century. Today it is the site of Worldport, UPS’s global air hub and central logistical operations. Louisville is also the headquarters of one of the world’s largest fast food companies: Yum! Brands, which operates KFC, Pizza Hut, and Taco Bell.

The West Louisville Food Hub, an estimated $45 million project, is still in the early stages. In mid-September, the city formalized the land grant, and while the architectural team has been selected, it has not been announced yet. Meanwhile, Seed Capital KY is applying for New Markets Tax Credits to cover about 30 percent of the initial cost of getting the site ready, with the remainder is expected to come from Federal and philanthropic grants.  The ground will likely be broken sometime in the second quarter of next year, with a projected completion date of mid-2016.

“This project has the potential to transform one of Louisville’s most distressed neighborhoods by bringing good food, good jobs, and good development to a vacant site,” says Mayor Greg Fischer.

– See more at: http://civileats.com/2014/12/03/the-nations-biggest-food-hub-coming-to-louisville-kentucky/#sthash.MTJVaIN7.dpuf

October 21, 2014 | The Lane Report

FRANKFORT, Ky. (Oct. 21, 2014) — During the past two years the Kentucky bourbon industry has nearly doubled its workforce, tripled its number of distilleries, and set new modern records for exports and barrel inventories, according to a study by the University of Louisville’s Urban Studies Institute.

The study says that more than 5 million barrels of Bourbon and other whiskeys are currently aging in Kentucky — the highest inventory in nearly 40 years.  That means there are about one million more barrels in Kentucky than people.

“We all knew the Bourbon renaissance was taking this iconic industry to new levels, but this data is absolutely phenomenal,” Beshear said. “The amount of progress is unrivaled and unparalleled. The Bourbon boom is real and producing results for all Kentuckians.”

The 67-page report — the third study since 2010 — is the most comprehensive analysis ever conducted on the economic and fiscal impact of Bourbon and distilled spirits in Kentucky, said Kentucky Distillers’ Association President Eric Gregory.

According to the report:

• Distilling now contributes $3 billion in gross state product to Kentucky’s economy every year, up from $1.8 billion just two years ago, a 67 percent increase.
• More than 15,400 people owe their paychecks to the Bourbon industry, compared to 8,690 in 2012, a 77 percent increase.
• Payroll for those workers has skyrocketed to more than $707 million from $413 million I 2012, a 71 percent increase.
• Average salary for distillery employees is $91,188.
• Distilleries plan to spend $630 million in capital investment over the next five years as the ad valorem “barrel tax” is offset by a corporate tax credit that distillers are required to reinvest in their Kentucky operations. This will create an additional 1,500 jobs, $43 million in payroll and $5 million in tax revenue.
• Total capital investment will surpass $1.3 billion in projects over a 10-year period starting in 2008.
• Kentucky distillers source approximately 40 percent of all of their grain from Kentucky farms.
• The study concluded that there is avenue for increasing Kentucky sourced grain with a potential impact of $89 million in sales to Kentucky farms.
• Organically grown, Non-GMO corn is in high demand among several of the distillers.
• The number of licensed distilling companies has tripled – from 10 to 31 in two years. That’s the most distilleries in Kentucky since the repeal of Prohibition.
• Distilling remains one of the state’s top job creators with a 4.35 spin-off factor, meaning every distillery job helps create four other jobs. Distilling now ranks second in total employment and job multiplier out of 245 industries (only animal processing ranks higher).
• Distilling industry employment is up 21 percent since 2000.
• New craft distilleries employ 127 people with salaries totaling more than $4 million. They have invested $30 million already, and plan to spend another $25 to $30 million in the next five years.
• Total property tax assessments have jumped to $2 billion from $1.3 billion in 2012, a 54 percent increase.
• More than $166 million in tax revenue for local and state governments is generated by spirits production and consumption, up from $126 million in 2012 (a 32 percent increase).
• Bourbon and Tennessee whiskey account for $1 billion of the total $1.5 billion in distilled spirits exports, up from $768 million in 2012. It is, by far, the largest export category among all U.S. distilled spirits.
• Barrel inventories are at their highest levels in 40 years, with more than 5.3 million aging currently in Kentucky. Production levels are up 53 percent in the last two years and 150 percent in the last 15 years.