There are certain characteristics of borrowers who will struggle at the end of the agricultural commodity super cycle. This includes farmers who won cash-rent lotteries during the upswing, as well as farmers who have high equity but marginal profits. Young ag professionals and rural America will also feel the pinch of the commodity downturn....More
The National Farm Machinery Show turned 50 years old this year, and it continues to attract more than 300,000 farmers from across the nation and beyond. I spent some time at the show during the first two days, dodging and weaving in the crowded aisles over 27 acres of exhibits. Here is my first installment of items I found interesting.
In the coming years, there will be ag borrowers who will struggle. Three specific groups to watch are those businesses that utilized too much of their profits and working capital to purchase land, those who acquired machinery to reduce income taxes and those with high debt levels....More
With smaller net farm incomes, farmers have less money to spend to grow their corn and soybeans. To get through it, experts suggest a strategy: short-term investments, crop insurance, accurate records, cost of production and more....More
Many producers, including larger operations, quickly get themselves into a serious financial condition if they are complacent and fail to monitor financial records. A good CEO producer will generally have a good idea where they stand financially at any point in time....More
It appears we are definitely likely to see much tighter profit margins in corn and soybean production in 2015 and beyond, as compared to profit levels in recent years. These tighter margins can be manageable for farm operators that pay attention to farm operating expenses, land costs, overhead costs, etc., and have a good handle on what their breakeven market price levels are....More
At a recent event, David Kohl offered advice to teenagers who want to farm or be in the agriculture business. Focusing on different types of education and classes, he encouraged students to take a variety of classes, focus on the good professors and to complete internships outside of their region and country....More
Let’s examine five-steps for returning to positive margins in your agriculture business, in no particular order. Some of these steps can be used to build efficiency in profitable businesses as well....More
Energy costs may not be your largest expense on the farm, but it's one that you can jump in on and make a fairly large impact without changing productivity, says Mark Hanna, Extension ag engineer at Iowa State University. He offers ideas for conserving fuel, including reduced tillage passes, shifting up, front-wheel assist and hybrid choice and drying....More
The reality is setting in that some producers, particularly those in the grain sector, will experience negative margins in 2015, which is something not experienced in many years. How can a producer troubleshoot their business and work with their lender when margins are tight, or even negative?...More
In 2015, crop revenues are likely to be significantly reduced compared to revenue levels in recent years. 2015 crop input costs for seed, fertilizer, and chemicals are likely to be similar to 2014 levels, and land rental rates will likely remain fairly high, which adds more risk to 2015 crop production....More
Everyone has had their fill of football bowl games, and now we are into the college and professional football playoffs, which usually provide some surprises and upsets. This is much like thinking ahead about what to expect in 2015. The following are a few of the thoughts and perspectives that you may want to consider in your planning or conversations with your business partners....More
The five agriculture stories to read this week include farm revenue outlook for 2015, as well as long-term agricultural projections. Read about a farmer who is building soil organic carbon to grow better crops, and a company that's got a robot to do your nitrogen sidedressing. Finally, for some entertainment, take a fresh breath of farm air with the Peterson Farm Bros.
We've posted a lot of great stories and photos on the web this year! These are our most-viewed pieces and cover a variety of topics from helpful aerial images to GMOs, making a profit with lower corn and soybean prices to no-till yield secrets, and more! Check out our best from the web for 2014, and stick around for more great stories and photos in 2015.
The year 2014 has truly been a time of transition for the agricultural industry and rural areas. While challenging, there will be more opportunities to succeed in agriculture in the next decade than the last 30 years, but there will also be more opportunities to fail. A game plan including resiliency and agility will be the themes for 2015 and beyond for those moving to a higher level of management in the industry of agriculture....More
Recently there have been headlines about agreements between the industry and farm groups on data ownership and privacy. That’s positive. But it’s really not surprising that a company would agree that you own your data and that it will be returned or removed from their servers. Or that you will be allowed to direct whom it gets shared with or sent to....More
The reality has set in that grain prices, cash flow and profit margins will be modest at best. Whether this part of the cycle correction will be one, two, or even five years or more in duration, farmers and their lenders will have to manage through these economic white waters....More
If your working capital burn rate is less than one year, it would be considered high risk. Above 3.5 years is indicative of a strong second line of defense and of course, between one and 3.5 years would be considered acceptable, but not stellar. To say the least, this winter and next year will be a balancing act as farmers juggle quickly converting liquid assets to cash to keep their businesses in operation....More
The combination of lower projected corn prices and soybean prices in 2015, together with nearly steady input costs for seed, fertilizer, and chemicals, will limit estimated potential returns over direct expenses and land costs, at average crop yields. Another major variable in breakeven levels in crop production are loan payments on capital investments such as farm machinery, facilities and land purchases....More
Five agriculture stories to read this week include advice for renegotiating farmland leases (if you haven't done so already), as well as an FAQ on Title I programs in the 2014 Farm Bill. Read a perspective from Bayer CropScience CEO about the benefits of modern agriculture, and how that impacts our food safety. And while the Thanksgiving holiday has passed, it's not too late to be #thankful4ag, and to take a look at what U.S. farmers provide to make those amazing Thanksgiving meals.
Lessons from the past find that the stress point in business financials is repayment capacity given debt service commitments. Repayment capacity and the management factors that influence it should be front and center in many farmers’ game plans....More
I’m a believer that agronomic common sense and real world observations tell us that avoiding doubles and poor seed spacing is critical to higher yields. But they are only a few staves in a very complex agronomic rain barrel and the $ signs flashing on the monitor screen are only real if proper seed placement is your lowest stave....More
This month in particular, let's all be #thankful4ag. In doing so, go to thankful4ag.com, a cool website set up by Bayer CropScience. There, you can create a virtual holiday meal, learn some neat agriculture facts, and, the best part, help donate meals to those in need....More
The grain industry is taking a body blow punch as prices have moderated over the year. If the lower prices continue into 2015 and beyond, there will be a “punch in the mouth” which will disrupt many producers’ strategic planning in the middle and later parts of the decade. A certain set of producers will still be profitable in the economic moderation. Let’s examine some of their characteristics....More
Five agriculture stories to read this week offer advice for watching your bottom line during this time of lower commodity prices. There are tips for winterizing your sprayer, as well as tips for successful weed control. Also read about the impact of low gas prices on the ethanol market. Finally, for some fun, enjoy the latest Peterson Farm Bros. parody, I'm so Farmer. Those fellas are so clever.