Most Recent Blog Posts

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
Aug 04, 2014

Strategies for handling tighter margins in agriculture

A young agricultural lender recently asked, “With tighter margins anticipated in the future, where should producers focus their energy to maintain....More
Jul 29, 2014

Back to the Future, Part 3: Interest rates now vs. 1980s

It is not only today’s low interest rates, but the fact that there has been little movement in rates over almost a half a decade which is interesting....More
Jul 22, 2014

Back to the Future, Part 2: Ag lending and financial management

An interesting trend in both the 1980s and today is that late in the economic cycle, many lending institutions saw opportunity in the agriculture....More
Jul 15, 2014

Views from the corn field

In visiting with producers between sessions at a recent conference, the big question was, “What if a large crop occurs next year in both hemispheres....More
Jul 08, 2014

Back to the Future, Part 1: Farm economy in 1980s vs. 2010s

One question during a recent forum discussion with ag lenders put me and other professors in the Back to the Future time machine to discuss the....More
Jul 01, 2014

Economic halftime report

Globally, the economic slowdown of emerging nations along with unrest in Ukraine, and now Iraq, bears watching. Remember, spikes in oil prices have....More
Jun 24, 2014

Complacency: The Silent Killer

Complacency can be the silent business killer. Peer analysis and benchmarking can be the catalysts that motivate managers to focus on aspects of the....More
Jun 17, 2014

Crucial farm transition management conversations: In-laws joining farm operation

How can a son-in-law or daughter-in-law bring up the conversation about joining the farm operation or possible ownership? Often the younger....More
Jun 10, 2014

Working capital: The shock absorber

While 33% working capital to revenue is appropriate for cash grain and market livestock businesses because of significant inventory, is this level of....More
Jun 03, 2014

China to overtake the U.S. economy

China is a rising economic power and with that status it will become a bigger partner in world economic trade. It will require China to step up to....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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