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  • Nov 26, 2013

    Tips for high-quality balance sheets 31

    High-quality balance sheets initially can be difficult and time-consuming to prepare, particularly given all the livestock and crops involved in diversified and multi-entity operations, but if updated in a timely manner, they're a good financial management tool for farm operations....More
  • Nov 19, 2013

    Business tips for low-equity, young farmers: Part 2

    If you're a young, low-equity farmer, David Kohl recommends examining incentive programs specifically for beginning farmers, building capital when experiences are profitable and seek a relationship-based lender....More
  • Nov 12, 2013

    Business tips for low-equity, young farmers: Part 1

    What advice would you have for a low-equity young producer either launching or growing their business? This was a question from a group of 34 lenders representing nine states in our Farm Credit University blended course which includes online and face-to-face training. Dr. Alex White from Virginia Tech and I tag-teamed this challenge with rapid fire responses....More
  • Sep 17, 2013

    An Aussie’s view of financial, business benchmarking: Part 4: Liquidity

    Net working capital, measured by current assets minus current liabilities, is a measure of the current economic times in agriculture. To make it a relevant measure of liquidity, net working capital must then be divided by the business revenue. It is important to calculate this metric each year at the same time of year to maintain consistency....More
  • Sep 10, 2013

    An Aussie’s view of financial, business benchmarking: Part 3: Debt levels

    If you have been following this series of articles on financial and business benchmarking, you know benchmarking is one of the top-10 best management practices worldwide in farming and ranching. Richard Heath, an Australian farmer and farm management instructor at the University of Sydney in Australia, recommended this practice to a group of FFA New Century Farmers as he was helping me present at a leadership conference in Des Moines, Iowa, this summer. Now, let’s focus on debt levels to build upon the last two articles that justified the practice and discussed profit benchmarks....More
  • Jul 30, 2013

    Where is the Work in Working Capital? 11

    A producer from Ohio really challenged a young lender the other day. He stated, “You lenders and academics preach that I need working capital reserves. However, I cannot see how working capital really works for me.”...More
  • Jul 16, 2013

    Bankers’ Views: Part 2

    In the last column, discussion centered on bankers’ views on interest rates based upon seniors enrolled in the 64th annual session of the Graduate School of Banking at LSU. The consensus was that low interest rates and an accommodative Federal Reserve in the U.S. would remain until late 2014 and into 2015. Let’s examine additional questions that were asked of the seniors through anonymous “clicker” technology....More
  • Jul 9, 2013

    Bankers’ Views: Part 1

    Everyone is watching the U.S. Federal Reserve and the central banks of the world. The bankers were asked to provide their feedback on when there would be an increase in the fed funds rate. No bankers expected an increase in 2013; however, some indicated that tapering off of bond purchases and mortgage-backed security purchases could occur....More
  • Jun 25, 2013

    Family Living Costs Gone Wild? Part 2

    In the last article, discussion centered on farm family living cost trends based upon the family living data provided by Nebraska Farm Business, Inc. The average withdrawals now exceed $100,000, with over a $60,000 variation from the top third to the bottom third of producers in the database. The largest specific line item deviations from the high to low third are in cash donations, household supplies, recreation, repairs, life insurance and, yes, the “catch-all” miscellaneous category, which was two to five times greater for the group at the high end of the spectrum....More
  • Jun 18, 2013

    Family Living Costs Gone Wild? 7

    One of the major discussion points at ag lending and banking schools is the trend in family living costs and withdrawals from farm and ranch businesses. Some lenders say that their customers are living on $40,000/year, while others state that the living withdrawals have increased dramatically, particularly in the last five years with strong grain and commodity prices....More
  • Jun 4, 2013

    Criteria for Enduring the Commodity Super Cycle and Land Value Correction 3

    If a farm is profitable and the profits are allocated properly, all financial criteria on the farm and ranch business will improve. In recent years with the extensive appreciation of land values, some have ignored profitability, or it has become a secondary priority. This is particularly true with the “millionaires on paper” as a result of inflation that have never earned a dollar of profit....More
  • May 28, 2013

    How Long Will Federal Reserve Continue "Easy Money" Policy? 122

    The stock market recently bounced to a record high of 15,000. Central banks around the world are opening up the floodgates of stimulus. In my road warrior travels, I have noticed numerous people are concerned about how long the Federal Reserve will continue their “easy money” policy....More
  • May 21, 2013

    Perspectives on U.S. Farm Debt 387

    There is considerable discussion among agricultural economists and lenders concerning the status and trends of U.S. farm debt. Let’s dig deeper into the subject and provide perspective....More
  • May 7, 2013

    Financial Shock and Stress Testing 8

    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....More
  • Oct 2, 2012

    Where is the Risk?

    Many of you have faced this summer’s drought and its implications. Of course, crop insurance was a key player in this year's economics, and some producers whose land received moisture at the proper times and proper levels benefited from solid yields at very strong prices. Land values and cash rents continue to rise as profit expectations are capitalized into land prices....More
  • Sep 18, 2012

    Surprise from the Federal Reserve

    The announcement last week by the Federal Reserve’s Federal Open Market Committee (FOMC) of quantitative easing part three (QE3) came as a surprise to me and many others. I was attending a bank advisory board meeting made up of management and leading agricultural industry players, and when the announcement was made, groans were heard throughout the room....More
  • Aug 28, 2012

    Student Debt Jail House Rock

    Based on the title of this column, many of you probably think I have been listening to too much of the Elvis Channel on satellite radio during my extensive travels. No, seriously, young people in America are accumulating student debt at an alarming rate, which in turn limits their opportunities up to a decade or more....More
  • Jul 27, 2012
    Corn+Soybean Digest

    2012 Drought: Financial Impact on Farmers

    While you can see the effects of the drought on the crops as you drive down the road, what you don't see is the financial impact it has on farmers. Kent Thiesse, vice president, MinnStar Bank, Lake Crystal, MN, and former Extension educator, talks about the impacts on crop farmers and their crop insurance coverage, as well as the financial impact of the drought on livestock producers. Thiesse reminds farmers to be sure to talk to your crop insurance agent during this time, as well as your lenders....More
  • Jul 24, 2012

    Perspectives on Working Capital

    I just finished teaching at the 14th annual National School for Experienced Ag Lenders in Spearfish, South Dakota. This year's group of 70 ag lenders and regulators was very open-minded and eager to learn, which was a blessing to all the instructors involved with the school. One student asked the following question, which is very relevant to lenders and the producers whom they serve....More
  • Jul 10, 2012

    Views of Risk From Your Lender’s Perspective

    Let’s go to the other side of the desk, or in today's world, the iPhone or the iPad, and view risk from the perspective of the institutions that lend you money. This perspective was drawn from a recent Farm Credit University Commercial Ag Lending class, which had participants from all across the nation....More

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