Most Recent Blog Posts

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
Sep 08, 2014

Profit margin compression, part 3 – Price reality

Inflation, while benign in the general economy, has been running full steam ahead in input and operating costs in the agriculture industry ranging....More
Sep 02, 2014

Profit margin compression, part 2: Operating expenses to revenue ratio

The average producer on FINBIN databases typically spends 73-75¢ to generate $1 of income, leaving only roughly 25¢ for other financial obligations....More
Aug 26, 2014

Profit margin compression, part 1

In over 30 years analyzing and examining farm record data, I have noticed that profitability decline will usually precede cash flow and repayment....More
Aug 19, 2014

Global and domestic economic risk

Currently, as of mid-August, geopolitical risk is the largest risk with a “code red.” The unrest in Ukraine and tension in the Middle East move....More
Aug 12, 2014

Ag lenders talk about agriculture land values

Nearly 30% of participants in a recent class indicated values had increased by more than 10%, while the largest percentage, 64%, responded there had....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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