Road Warrior

Shock and Stress Testing: Analysis by Lenders

Tue, 14 May 2013 18:23:00 +0000

One of the major financial shock tests that a lender must perform concerns concentration of credit. Regulators and oversight specialists are very concerned about this component as agriculture consolidates with fewer producers generating more of the revenue and carrying a larger proportion of the debt.

Road Warrior

Financial Shock and Stress Testing

Tue, 07 May 2013 21:27:00 +0000

The other day a young producer was concerned because he had difficulty obtaining his operating loan for yearly operations. He stated that the lender performed financial shock tests that raised concerns about his financial status. Let’s examine some of the financial shock tests that are top of mind with your lender, and particularly the regulators that provide oversight on agricultural loans.

Road Warrior

Farmland Values and Commodity Prices

Tue, 30 Apr 2013 21:26:00 +0000

Speaking of webcasts, a banker from Iowa asked an interesting question during a recent webcast. He wanted to know my thoughts on how much farmland prices would be adversely affected in 2014 and 2015 if prices for crops drop below breakeven levels, for example $3-4/bu. corn. Let’s examine this issue that is top of mind with lenders and to a lesser extent with agricultural producers.

Road Warrior

Enthusiastic About the Future of Agriculture: Top-10 List, Number 1

Tue, 23 Apr 2013 21:12:00 +0000

The final reason I am optimistic about agriculture is not one specific reason. It is a combination of reasons based upon my travels, interaction with people and general observations from my past experience and vision into the future.

Road Warrior

Green Shoots in the U.S. Economy

Tue, 16 Apr 2013 20:29:00 +0000

Despite all the bickering and inaction of our leaders in Washington, D.C., the U.S. economy is like green shoots of grass emerging from the winter doldrums. What are some of the metrics indicating a comeback in the economy?

Road Warrior

BRICS Nations Losing Economic Steam

Tue, 09 Apr 2013 20:07:00 +0000

Ouch! Corn prices dropped 70¢/bu. within a two-day period following the release of USDA’s March crop report. Welcome to the wild world of global economics! Are commodity prices being affected by weather and adjustments being made in planting, or are there other concerns on the economic horizon?

Road Warrior

Enthusiastic About the Future of Agriculture: Top-10 List, Number 2

Mon, 01 Apr 2013 14:36:00 +0000

To continue my top-10 countdown, here is my number-two reason to be enthusiastic about agriculture.

Road Warrior

The Tsunami of Deferred Taxes

Tue, 26 Mar 2013 18:06:00 +0000

A tax tidal wave of epic proportions is emerging on many farms that have had an offensive game strategy in recent years, pushing taxes forward. Strong profits, particularly in the grain industry, and aggressive farm tax strategy using accelerated depreciation are the major culprits. Prepaying expenses and deferring income into future years is also creating a large deferred tax liability on farm balance sheets.

Road Warrior

Enthusiastic About the Future of Agriculture: Top Ten List: No. 3

Tue, 19 Mar 2013 18:29:00 +0000

In my speeches and seminars, eyebrows will raise and glances between people will occur with nodding and a look of fulfillment when I make the following comment: “The best crop you raise will be your children, grandchildren or youngsters you take under your wing as a mentor.”

Road Warrior

Benchmarking to the Elite: Part 2

Tue, 12 Mar 2013 20:47:00 +0000

My last article focused on some of the financial characteristics of producers who attended the Executive Program for Agricultural Producers (TEPAP) this year. Now I’ll discuss some of their management practices. This supercharged conference, coordinated by Danny Klinefelter, is an outstanding educational venue for agriculturalists that offers education and networking with individuals from over 20 states, four Canadian provinces, South America and Australia.

Road Warrior

Benchmarking to the Elite: Part 1

Tue, 05 Mar 2013 20:41:00 +0000

One of the elite management learning experiences in agriculture is the Executive Program for Agricultural Producers (TEPAP) at Texas A&M University, coordinated with leadership of Danny Kleinfelter. Now in its 24th year, this gathering of agricultural lifelong learners with an array of outstanding presenters who have a vast amount of background and experience is truly the “Super Bowl week” of education and networking in agriculture.

Road Warrior

The Advisor Who Paid Off

Tue, 26 Feb 2013 21:52:00 +0000

The other day our veterinarian, Todd, shared a story with me about a producer who came to him with a pinkeye problem, which was not only aggravating, but costing him a lot of money. He told me this story during a driving sleet storm as we were checking cows for heat as part of our breeding program.

Road Warrior

Enthusiastic About the Future of Agriculture: Top Ten List: No. 4

Tue, 19 Feb 2013 21:59:00 +0000

Number four on the countdown list of why I am excited about the future of agriculture is the ability to be entrepreneurial and to grow your wealth over the lifecycle of the business.

Road Warrior

The History of the Great Commodity Super Cycles

Tue, 12 Feb 2013 19:54:00 +0000

I was surprised by the record attendance recently at my annual “Agriculture and Beyond” speaking events sponsored by the Nebraska Bankers Association. These events in Norfolk and Lexington, Neb., had overflow crowds and some bankers, producers and agribusiness people had to stand out the hallways. Welcome to the great commodity super cycle that has brought wealth and prosperity to much of rural America!

Road Warrior

Perspectives from the Road

Tue, 05 Feb 2013 20:55:00 +0000

Sometimes as I travel around the country Willie Nelson’s song “On the Road Again” comes to mind. While driving my Hertz rental car and listening to Sirius radio, I have had a chance to survey the upper Midwest’s agricultural landscape and visit with over 2,000 producers in the past few weeks. Here are some observations that are top of mind.

Road Warrior