I recently made my annual trek to WebEquity Solutions’ annual client conference in Omaha, NE. What started over 15 years ago as a small conference with less than 40 people is now one of the showcase ag lender events of the year with an emphasis on technology. This year one of my assignments was to serve on a panel with some ag lenders. I was placed in the hot seat to provide wisdom and wit about the current state of affairs. The following are some specific points and perspectives that I covered....More
Some farm operators in Minnesota, Iowa and surrounding states will be facing reduced yields on some farm units in 2013, due to very late planting, severe storms and very hot and dry weather late in the growing season. With Federal Crop Insurance, every year is different, and with the multiple options available to producers, there are many variable results from crop insurance coverage at harvest time....More
One of the top 10 questions I am asked, and perhaps number one or two, is “Will the farmland bubble burst?” Examination of farm real estate data by state illustrates a compelling story that farmland is not experiencing a national bubble, but one of regional and local proportions. If there is a land bubble, it is located in the upper Midwest and the western Corn Belt. For example, our good friends in Nebraska have experienced a 50% increase in land values in the past two years, followed closely by Iowa, Illinois and Minnesota....More
The last column focused on a young producer who provided advice to his peers at a young and beginning farmer and rancher conference in Omaha, Neb. I explained how this industry leader recommended having a team of advisors and doing succession planning. Let’s continue the discussion....More
The U.S. federal government is on the verge of a shutdown, and the farm bill extension is on the verge of expiring. Despite efforts by the House to pass legislation, the bill has not yet gone to conference between the two branches. There is hope a conference will start soon....More
Purdue Extension agricultural economists are urging farmers to calculate estimated budgets for the 2014 cropping year and are offering a guide to help with the process. The 2014 Purdue Crop Cost and Return Guide, which is available for free pdf download from the Purdue University Center for Commercial Agriculture website, gives estimated costs for planting, growing and harvesting a variety of crops, as well as estimated contribution margins and earnings....More
At a recent event in Omaha, NE, a young producer, who was first appointed to the board of directors and then elected, provided a glimpse of the type of youth with vigor that will lead agriculture in the decades to come. This young person provided some advice to his peers in the audience that was well worth capturing, which I did on the Delta Airlines napkin that was available in my pocket....More
he farm bill has been shifted from park into first gear with action by the House of Representatives to make cuts in the Supplemental Nutrition Assistance Program (SNAP), driven by conservative demands to reduce spending and put food stamp recipients to work. While the legislation was approved by a slim margin, it allows the Farm Bill to move to a conference committee with the House and Senate....More
We asked three farmers: What is the biggest lesson learned from your landlords? Lessons learned include staying in touch with people, operating the property as if it's your own, continuing relationships through generations and being open about opportunity....More
Near- to above-normal temperatures dominated the country, except for cooler-than-normal weather in the rainsoaked Southwest. Readings averaged at least 5° F above normal across the Plains and western Corn Belt, although cooler weather arrived toward week’s end.
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
If people are getting something done – mistakes are going to happen. The question becomes: What to do when a mistake’s been made? Since the 1940s, one of the most important assets on the farm has been the tractor PTO. The power and versatility it brought revolutionized productivity on the farm. Unfortunately, it also became a significant source of injury and death on the farm....More
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
A stubborn ridge of high pressure left much of the Corn Belt under a hot, dry weather regime, further reducing corn and soybean yield prospects. Dryness, which first appeared in the western Corn Belt (e.g. much of Iowa and northern Missouri) during the second half of June, has expanded in recent weeks to encompass much of the Midwest.
There are four cornerstones regardless of enterprise, size or location that need to be examined.
First and foremost are profits, which are the lifeblood of any business. Do you consistently have a positive bottom line?...More
Many farm operators across the Upper Midwest are facing some crop loss in 2013, due to late and prevented planting this past spring, and now from very hot, dry weather late in the growing season in some areas. There will undoubtedly be large financial losses to some farm operators in many areas, as well as with associated businesses, and in local communities. The drop in corn prices and soybean prices, compared to recent years, will also lead to further financial loss for affected farm operators. The financial losses to corn and soybean producers in 2013 will be somewhat mitigated for farm operators that carry Federal Crop Insurance coverage....More
A new farmland financial index could bring liquidity to the farmland market, say the developers of the PeakSoil Iowa Cropland Value Index. Corn and soybean growers might use a related futures contract, if it materializes, to hedge their risk....More
Cash rental rates for 2014 have already been discussion topics for farm operators and landowners, since the late 2013 harvest may spill into that typical discussion period. And many operators have expressed their desire for lower rental rates, or at least lower base rates for flexible cash rent agreements for 2014....More
I’ve learned to trust the people who advise me. The hybrids change so fast I’m not planting anything today that is exactly the same as what we were growing three years ago, says Steve Lawler, Ogden, Iowa....More
I hit the jackpot the other day when I was in Des Moines, Iowa to speak to the New Century Farmer group. A chance meeting with an Australian farmer at 6:00 AM in the workout room started off the day with a bang. Richard Heath, a fourth-generation farmer from Down Under was visiting the United States and Canada, and had a stopover golf outing in Nebraska, that was circumvented by my request that he come join me to speak to the New Century Farmer group....More
The 2013 National Agvocacy 2.0 Conference is happening right now in North Carolina. Over 100 farmers have gathered to learn more about social media and other digital strategies to promote agvocacy, and all things agriculture....More