As I wrote in October 2007, there have been three times in the last 100 years that we have had a similar period: 1914-1916, 1940-1945, 1973-1975. Significant capital flowed into production agriculture in each of these periods. During the last period, 1973-1975, capital was more fluid and moved into agriculture more quickly during the run-up in prices.

Inflation in all farm inputs was greater than the previous two periods. Interestingly, when times turn bad, the capital abandoned agriculture as quickly as it came. I think this run-up in prices will cause capital to move into agriculture much more rapidly and dwarf what we saw in the last three periods; it will likely leave at a multiple of that speed.

These are interesting times to be sure, but if we manage risk appropriately, we will see exciting and profitable times.

Moe Russell is president of Russell Consulting Group, Panora, IA. Russell provides risk management advice to clients in 34 states and Canada. For more risk management tips, check his Web site (www.russellconsultinggroup.net) or call toll-free 877-333-6135.