Call to Order and Roll Call
The 3rd meeting of the Interim Joint Committee on Agriculture was held on Thursday, August 27, 2015, at 10:00 AM, in the VIP Room, Freedom Hall, Louisville, Kentucky. Representative Tom McKee, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Paul Hornback, Co-Chair; Representative Tom McKee, Co-Chair; Senators C.B. Embry Jr., Chris Girdler, David P. Givens, Stan Humphries, Dennis Parrett, Dorsey Ridley, Damon Thayer, and Whitney Westerfield; Representatives Lynn Bechler, Mike Denham, Derrick Graham, David Hale, Richard Heath, James Kay, Kim King, Michael Meredith, Suzanne Miles, Terry Mills, David Osborne, Sannie Overly, Ryan Quarles, Tom Riner, Bart Rowland, Steven Rudy, Dean Schamore, Rita Smart, Wilson Stone, and James Tipton
Guests: Representative Jonathan Shell, Representative Dennis Keene, Representative Linda Belcher, Clifford “Rip” Rippetoe, President and CEO, Kentucky State Fair Board (KSFB), Tom Schifano, Louisville, KSFB, Gib Gosser, KSFB, Ron Carmicle, KSFB, Fred Sarver, KSFB, Dr. Mark Lynn, Chairman, KSFB, Jim Cauley, KSFB, Bill Tolle, KSFB, Marshall Coyle, KSFB, Roger Thomas, KSFB, Dr. Nancy Cox, Dean, University of Kentucky College of Agriculture Food and Environment, KSFB, Louisville Mayor Greg Fischer, Commissioner James Comer, Kentucky Department of Agriculture (KDA), Dakota Meyer, recipient of the Medal of Honor, and Miss Kentucky 2015 Clarke Davis.
LRC Staff: Lowell Atchley, Kelly Ludwig, Stefan Kasacavage, and Susan Spoonamore, Committee Assistant.
The July 8, 2015 minutes were approved, by voice vote, without objection upon motion made by Representative Steven Rudy and second by Representative David Hale.
Report of the Kentucky State Fair Board
Mr. Rippetoe announced the appointment of Steve Kelly, Deputy Commissioner of KDA, as the new Executive Director of Expositions beginning September 16, 2015. The board has been working with and talking to exhibitors. Board members are briefed daily on the operations of the fair. The most exciting thing about the Kentucky State Fair this year is the weather compared to last year’s eight days of rain and four nights that the grounds had to be evacuated.
The purpose of the Kentucky State Fair is to advance Kentucky’s economy by serving convention, tourism, and agriculture industries while honoring the heritage of all the agriculture roots. It is important to reach out to the county fairs. KSFB members visited 29 county fairs and horse shows. Various commodity groups are business partners by contributing Kentucky Proud products for the fair, the North American International Livestock Exposition (NAILE) show, and year-round events.
Mr. Rippetoe said there had been a real need for an additional day for the World Championship Horse Show so it was decided to eliminate concerts on that night. KSFB decided to bring back car-load days, which are more affordable for families. Prepaid, discounted parking tickets are also available. To help with overflow, Papa John’s Football Stadium provides free parking. On the first Saturday of the fair, attendance was around 74,000 and on Sunday the attendance was approximately 52,000, representing the best Sunday attendance in almost a decade.
Mr. Rippetoe said that Heritage Hall and Commercial Exhibits vendor areas had been sold out. General exhibits such as agricultural crops and poultry were down because of sanctions regarding the bird flu. Entries for beef cattle were flat but the dairy and steer shows were good. Sheep and swine entries were up causing a “good” problem in that more floor space is needed. Storage is becoming a real issue due the condition of Cardinal Stadium. All the stalls have been moved into tents and storage into parking lots under tarps. Mega-Caverns stores the basketball courts. The board will present a new six-year plan to the legislature seeking funding for the demolition of Cardinal Stadium and building an Agriplex that will consist of storage and be suitable for other agriculture related events throughout the year.
Mr. Rippetoe stated that there is no other facility in North America that can compare to the Exposition Center and Convention Center, both combined under one organization that also produces three shows owned by one entity. Kentucky is in a unique situation and it is important to remain competitive nationwide. KSFB will advance a master plan covering the next 5, 10, 15, and 20 years so it can continue to grow as an organization and continue to support agriculture.
The two facilities host over 380 events a year, generating over $480 million in economic impact. Out of the $480 million generated, $36 million went to taxes with approximately $34 million of that going to the state general fund. There are deferred maintenance issues with the Exposition Center. Some tax revenue could be used to help invest further to protect the Kentucky Exposition Center.
Over the course of time there has not been funding to help maintain the facilities. According to Mr. Rippetoe, the fair and the Convention Center has a significant impact on the economy in the Commonwealth but to grow the board has to start looking at deferred maintenance and trying to find ways of repairing infrastructure and move forward. As important as agriculture is and always will be, the board also has to pay attention to the rest of the business. It is true and questions have been asked in the past that 50 percent of gross revenues come from the three shows.
Mr. Rippetoe said that if the Farm Machinery Show was taken away, the State Fair and the NAILE would be doing good to break even. The Farm Machinery show is an agribusiness trade show. In looking at agriculture, Mr. Rippetoe said he was talking about livestock and those things that can promote Kentucky and the agricultural industry statewide and nationwide. From a pure events standpoint, 17 percent is agriculture related, which includes the State Fair, the NAILE, Farm Machinery Show, Beef Expo and others. The board is bringing in sponsor consultants to help find ways of doing more sponsorships. Sponsorships are about a 90 percent return on investments when done right. Roofs were damaged in the hailstorm in 2012 and even though a settlement was reached, it was $7 million short of what is needed to fix the roofs. Most asphalt is at least 22 years old, and about 40 percent of the chairs are 30 years old.
Mr. Rippetoe said that the board has the ability to generate economic impact and continue to be the most prestigious facility in North America. The Farm Machinery Show is second to none. Everybody in the farm machinery show business wants to be us. It is even more prestigious that the NAILE. There have been questions about the continuation of the NAILE shows. Those shows will continue for many years. The NAILE is wholly owned by the Commonwealth, and it is the board’s pleasure to be able to produce the NAILE on behalf of the Commonwealth. The board takes a great deal of pride in that the NAILE is world renowned in being the largest purebred livestock show.
In response to Senator Parrett, Mr. Rippetoe said that out of the $480 million total economic impact, agriculture related events, including the Farm Machinery Show, account for an approximately $60-$70 million economic impact.
In response to Representative Stone, Mr. Rippetoe said the 2015 North American should go as smoothly as always. The goal is to continue to make the NAILE the best show ever. Mr. Rippetoe said that he would be the General Manager, per the Governor’s Executive Order and Mr. Kelly would be assisting with the NAILE and he will be in charge of overseeing the State Fair and the Farm Machinery Show. It is a priority that all the transitions happen smoothly.
In response to Representative Tipton, Mr. Rippetoe stated that any request for proposal for food included a section for all vendors to comment and made a commitment to Kentucky Proud products.
Representative Smart said that she was glad to see that some of the board members traveled to different county fairs throughout the Commonwealth listening to their concerns.
In response to Representative Miles, Mr. Rippetoe said that an Executive Order established a 21-member Kentucky State Fair Board. Those members include two ex-officio members who are the presidents of 4-H and FFA. An Executive Order named Mary Taylor Cowles, a member-at large, as well as the sitting Executive Director of the Governor’s Office of Agricultural Policy, Roger Thomas. That Executive Order established a chairman and 18 members, nine agribusiness versus non-agribusiness by definition. It also established the sitting CEO of the Fair Board as General Manager of the North American, and it established a sitting CEO as the Chair of the Executive Committee of the North American.
In response to Representative Mills, Mr. Rippetoe said that attendance had been trending significantly upward from last year. Monday, Tuesday, and Wednesday are generally flat because of school.
Mr. Rippetoe said that board members received great suggestions when traveling to different county fairs. Based on some of the suggestions, there could be changes to entertainment and attractions. KSFB would be looking at making rules changes in some of the livestock shows.
Remarks on the Louisville/Jefferson County Farm to Table and other Food Marketing Programs
Mayor Greg Fischer stated that there are five economic development clusters in the city which focuses on food and beverages. Louisville was recently named number two in the country for the local food and restaurant scene because of its ties with Kentucky farmers. The mayor said there had been over 700,000 visitors to the bourbon trail, creating a real economic impact. The farm to table movement has good momentum and Louisville is continuing to work with farmers and making connections with artisanal and organic farmers. Mayor Fischer stated that large users of food are starting to expand from a standard Sysco product to a Sysco local food product. The University of Louisville is buying whole cattle from Kentucky farmers, and the offerings have been well received by the students.
Mayor Fischer said a proposed “food port” would help push more local food through the community and tie it in with the big users. The food port would be receiving, processing and distributing locally grown food. The port would also be an education center, urban demonstration farm, and contain the University of Kentucky Extension offices. Survey data shows that Louisville consumes about $2 billion a year worth of food. Approximately $300 million of that has some connection with the local food movement. A survey indicated that there is a food demand of $800 million. The survey also showed people wanting more local food because of higher quality and supporting local businesses.
Senator Hornback said Louisville had done a great job of promoting locally grown products and encouraging surrounding communities to participate.
There being no further business, the meeting was adjourned at 11:40.