Too often young people attend a university for the degree rather than the education, which can be a waste of money and time. As a professor, I am not disputing the value of an education; however, some of the most motivated lifelong learners are outside a degree program and they often make very successful entrepreneurs....More
How often have you wondered whether a new practice or piece of equipment will pay? Kenton, Ohio, farmer Brian Watkins built a computer farming simulation model to calculate the cost of such options. “It tells me how much time a piece of equipment will take to operate and repair, how much fuel will cost and how it will affect other things we do,” he says....More
In many of my speeches I emphasize that better is better before bigger is better; that is, get efficient before you embark on growth. What is a good financial measure of efficiency for farm businesses? One of my favorites is the operating expense to revenue ratio....More
One of the key financial ratios that agricultural lenders use to determine repayment ability is the term debt and lease coverage ratio. It measures the amount of debt obligations (debt service which includes principal and interest), compared to the debt servicing capacity (net income plus interest and depreciation)....More
A few simple precautions and a little bit of common sense can go a long way toward helping prevent farm-related accidents and injuries, especially at harvest time, two Purdue University agricultural educators say....More
Brian Haugen is preparing his farm for lean times. Leveraging his management experience, discipline, standard operating procedures (SOPs), a diversified revenue base, shared human resources for productivity and collaboration with more than 35 landlords, his corn and soybean operation will do its best to weather the storm over the next few years....More
Five agriculture stories this week offer tips for manure management and sulfur application. Read about propane supplies this fall, and get insight and tips for financial success on the farm during lean times. Also, watch the farm documentary Farmland on Hulu.
I could not be more excited to get the news that the Farmland movie is on Hulu and Hulu Plus! I saw a pre-screen of the film in February at Commodity Classic, and the film was released to a limited screening in theaters in April and May. If you didn't have the chance to see it then, watch it now. Like right now. Stop what you're doing, and watch this incredible film....More
Rising diesel prices have made tackling fuel economy more important than ever. Given how much you spend on fuel each year, even a small change in fuel usage can mean boost your profit. For example, using using a low-viscosity oil can boost fuel economy, but that's the just one of several management tactics you can use to boost profits in spring and fall....More
How often do we see, particularly in family business transition, a situation in which the younger generation returns to a business that has been a profitable high performer for the previous generation, but it continuously fails to “finish the race” or underperforms compared to peers when the younger generation steps into the driver’s seat?...More
The 5 Ag stories to read this week talk about the possibility of skipping Bt-traited corn in 2015 to help save costs, and offer examples of low returns for 2015. There is also help for making decisions regarding the new risk programs in the 2014 farm bill. Read what farmers learned in 2014, and remember to practice safety this harvest season as National Farm Safety and Health Week comes to a close.
The September issue of Corn+Soybean Digest offers a lot for readers. From data management to tips for financial success in turbulent times, what farmers learned in 2014 to strip-till tips. Check out these feature stories for insight on Ukraine corn exports, as well as marketing advice for low prices, using tillage for weed control and cover crop seed mixes.
In the long run, the key to success in a commodity business is being a low-cost producer. That advice comes from Purdue Distinguished Ag Economics Professor Michael Boehlje. “When you wake up each day, tell yourself, ‘My job today is to lower my costs,’ he says. “The only trouble is that Ukraine woke up seven hours earlier and got a head start on it.”...More
As you think about retirement, keep in mind how inflation can impact your investment strategies. At a 4% historical long-term inflation rate, $50,000 becomes $25,000 in buying power by the year 2032 (72 / 4 = 18 years). As a goal, one should aspire to generate a return on your investments including dividends and appreciation that meets or exceeds the rate of inflation to maintain buying power....More
The saga of the young farmer and rancher continues as transition in the agriculture industry is in full bloom. While there is no surefire way to get started, there are some common threats, whether starting from scratch or entering a family business. Let’s examine some of the threats and pitfalls that frequently arise....More
The average producer on FINBIN databases typically spends 73-75¢ to generate $1 of income, leaving only roughly 25¢ for other financial obligations. It is disturbing that this ratio jumped above 80¢ in 2013 for the first time since 1995, illustrating severe margin compression, particularly among the average producers....More
Brian Watkins farms near Toledo, Ohio. For a long time, he’s been working on a computer model to predict costs on his 7,000-acre corn and soybean farm. He came up with Cropzilla. Using a $3.50 corn price, the numbers have absolutely influenced the decisions he’s made on his Ohio farm, he says....More
In over 30 years analyzing and examining farm record data, I have noticed that profitability decline will usually precede cash flow and repayment ability issues by about two to three years. Could it happen this time?...More
Currently, as of mid-August, geopolitical risk is the largest risk with a “code red.” The unrest in Ukraine and tension in the Middle East move markets daily. Unfortunately, agriculture is often the industry first affected by political and military unrest....More
While the recently passed Water Resources Reform and Development Act “moves the needle,” far more needs to be done, says Paul Rohde, Midwest area vice president for the Waterways Council, Inc. He warns that by the end of this decade, 78% of waterway locks will have surpassed the end of their design life....More
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