A young agricultural lender recently asked, “With tighter margins anticipated in the future, where should producers focus their energy to maintain viability of their operations?” While there is no one strategy to fit all, the following is some advice that can be applied regardless of the business cycle or business enterprise....More
We've posted several new videos covering relevant topics for farmers, including: land risk management, cost management strategies, cost of production, marketing strategy for low-priced corn and more. Check out these videos for insight and tips from industry experts including David Kohl, Matt Roberts, Mike Boehlje and Michael Langemeier.
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. The accommodative Federal Reserve, attempting to stimulate the general economy, has, in turn, stimulated the agriculture and rural economy, putting it on steroids with extreme appreciation in farmland values and a depressed dollar, which has been very beneficial to agricultural export markets....More
This installment of “5 Agriculture stories to read” offers some help when deciding whether or not to spray fungicide. It also talks about research using an old maize gene (from oregano) to help new corn hybrids defend against pests. The USDA announced an ag investment fund for pensions and large investors, and an Extension expert offers tips for marketing corn at low prices. Finally, watch a parody about weed resistance; I think most farmers can relate!...More
As a farmer, how do you reduce risk? Ideas to accomplish that include: planting offensive and defensive hybrids and planning for multiple alternate future scenarios. Take some time to think about how you might react to reduced rail transportation, expanded GMO bans, an increase in the grain supply outside of the U.S....More
Farmfest 2014 will feature an exciting line-up of feature forums, including candidate forums for Minnesota governor, U.S. Senate and congressional candidates from Minnesota’s first, second, sixth and seventh districts. The forums will be held August 5, 6, and 7, in the Wicks Forum Building, near the center of the show site, which is located at the Gilfillan Estate, 7 miles southeast of Redwood Falls, Minnesota....More
An interesting trend in both the 1980s and today is that late in the economic cycle, many lending institutions saw opportunity in the agriculture industry, and thus came into the field of agriculture for profits....More
Michael Langemeier, associate director, Center for Commercial Agriculture, Purdue University, talks about managing farm costs. He says growers need to seriously question new machinery purchases and that cash rents should be negotiated. Those two items can help control costs when commodity prices fall below breakeven levels....More
This installment of 5 Agriculture stories to read offers tips on controlling large weeds, as well as aerial seeding cover crops. Read about prospective returns and farm revenue given lower corn prices, and learn about a genetic discovery that could lead to better soybean varieties. Finally, enjoy the latest parody hit from the Peterson Farm Bros!...More
Sam Halcomb calculates a field’s revenue-generating potential, then offers a landlord 25-33% of that for cash rent. He’s found over the years that 25-33% accurately reflects a point where he can profit from current market conditions, while capturing present market values to satisfy the landlord....More
Agriculture is becoming more and more distant, said David Kohl, professor emeritus, Virginia Tech University, when he spoke with CSD Editor Kurt Lawton at the Wyffels Hybrids Corn Strategies Conference at Wild Rose Farm, Inc., near Galesburg, Ill. “Anyone involved in the ag industry has to be an advocate; not only to other producers, but to the non-farm public,” he says....More
David Kohl spoke with CSD Editor Kurt Lawton about the farmer as a CEO, noting that profitable businesses have good people. From allocating profits to working capital and cost of production, as well as lender relationships, Kohl says that being proactive and having the right people around you is going to be critical for success....More
David Kohl, professor emeritus, Virginia Tech University, spoke that the Wyffels Hybrids Corn Strategies Conference at Wild Rose Farm, Inc., near Galesburg, Ill. Kohl stressed the importance of grain and livestock farmers knowing their cost of production in order to be successful....More
Matt Roberts, associate professor at Ohio State University, spoke at the Wyffels Hybrids Corn Strategies conference in mid-July at the Wild Rose Farm near Galesburg, Ill. Here he talks about the uncertainty of the corn market and prices, adding that there is more uncertainty due to the possibility of corn being added back to livestock rations because of lower corn prices....More
The new 2014 Farm Bill substantially streamlines the number of conservation programs and moderately reduces overall conservation funding by 6.5% from the existing 10-year baseline budget over 2014-2023. Many of the cuts are slated for 2018-2023.
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 similarities and differences in the farm economy now compared to the 1980s....More
Globally, the economic slowdown of emerging nations along with unrest in Ukraine, and now Iraq, bears watching. Remember, spikes in oil prices have been a major contributor to every recession since 1969. Overall, both the domestic and global economies are muddling along, uninspired by central bank stimulus both here in United States and abroad....More
The moderation in commodity prices, along with the potential for increases in ag real estate interest rates, will likely continue to put downward pressure on land values. Some farm management analysts have suggested that a combination of these factors could result in average land values dropping by as much as one-third from the highest levels in the next few years....More
Complacency can be the silent business killer. Peer analysis and benchmarking can be the catalysts that motivate managers to focus on aspects of the business that are done well, and then step outside with the advisory teams and other leading businesses to break into new territory, taking the business to a new level....More
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 generation family members are intimidated particularly if they have provided labor for the business for quite a while. What will frequently occur is that time will slip by and months become years without these important questions being asked and answered, which often ends up being disastrous to all generations involved....More
While 33% working capital to revenue is appropriate for cash grain and market livestock businesses because of significant inventory, is this level of working capital too aggressive for dairies, since milk inventory is picked up every day or every other day?...More
The number of farms in the United States in 2013 was estimated at 2.10 million, down 7 thousand farms from 2012. Total land in farms, at 914 million acres, decreased 360 thousand acres from 2012. The average farm size in 2013 was 435 acres, up 2 acres from the previous year.
From what I am hearing most end-users are about 65-75% covered through July but have next to nothing done for August. Obviously everybody is hoping imports will help resolve the situation, but no one is clearly certain about how this game will end.
Soybean traders are digesting the fact the US planting pace is now AHEAD of our traditional average. The USDA released data yesterday showing that 59% of the crop is now planted vs. 41% last year and 56% on average. In addition 25% of the crop is now "emerged" vs....More
The U.S. economy is showing mixed signals. The lead economic index (LEI) which foretells the future of the economy has been increasing in recent months, most recently up 0.4%, which is bullish for the economy. Sixty percent of the factors that make up the LEI are exhibiting positive signs....More