Most Recent Blog Posts

Dec 23, 2014

2014 in the rearview mirror: ag economy, technology, farm management

The year 2014 has truly been a time of transition for the agricultural industry and rural areas. While challenging, there will be more opportunities....More
Dec 16, 2014

Strategies for managing profit in agriculture during a down cycle

The reality has set in that grain prices, cash flow and profit margins will be modest at best. Whether this part of the cycle correction will be one....More
Dec 09, 2014

Agriculture financial management: Working capital burn rate

If your working capital burn rate is less than one year, it would be considered high risk. Above 3.5 years is indicative of a strong second line of....More
Dec 02, 2014

What happens when repayment fails?

Throughout the country many lenders and producers dealing with the grain industry may face situations when repayment is not possible this winter and....More
Nov 25, 2014

Repayment risk in a variable economic environment

Lessons from the past find that the stress point in business financials is repayment capacity given debt service commitments. Repayment capacity and....More
Nov 18, 2014

5 Characteristics of profitable farmers

The grain industry is taking a body blow punch as prices have moderated over the year. If the lower prices continue into 2015 and beyond, there will....More
Nov 11, 2014

Economic straight talk: The grain industry

The great commodity super cycle has burned out. It lasted for a decade, two and one-half times longer than any previous super cycle boom time over....More
Nov 04, 2014

Formal education in agriculture doesn't mean success

Too often young people attend a university for the degree rather than the education, which can be a waste of money and time. As a professor, I am not....More
Oct 28, 2014

Tips for farmer-lender meetings, communication

Recently, a farmer asked a panel I was a member of, “How often should farmers and lenders communicate during the year, particularly during the....More
Oct 21, 2014

Financial measure of efficiency for farm businesses

In many of my speeches I emphasize that better is better before bigger is better; that is, get efficient before you embark on growth. What is a good....More
Oct 14, 2014

What's the coverage ratio for your farm?

One of the key financial ratios that agricultural lenders use to determine repayment ability is the term debt and lease coverage ratio. It measures....More
Oct 07, 2014

Slipping farm profitability

After stellar financial performance from a net farm income standpoint from 2009 to 2012, median net incomes are moving back to levels observed in the....More
Sep 30, 2014

Got the racecar, but don’t know how to drive It

How often do we see, particularly in family business transition, a situation in which the younger generation returns to a business that has been a....More
Sep 23, 2014

The power of inflation: Time is not on your side!

As you think about retirement, keep in mind how inflation can impact your investment strategies. At a 4% historical long-term inflation rate, $50,000....More
Sep 16, 2014

Biggest threats to young, beginning farmers

The saga of the young farmer and rancher continues as transition in the agriculture industry is in full bloom. While there is no surefire way to get....More
What's Road Warrior?

Dave Kohl is an ag economist specializing in business management and ag finance. He can be reached at sullylab@vt.edu.

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