Dr. David Kohl is an agriculture industry expert and writes quarterly articles particularly for Farm Credit members. Read his most recent articles on this page.
Dr. Kohl is the Dean of Farm Credit University and a professor emeritus in the Ag Economics Department of Virginia Tech. He has conducted more than 5,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA, and regulators, as well as producer and agribusiness groups.
Kohl is currently president of AgriVisions, LLC, a knowledge-based consulting business providing cutting-edge programs to leading agricultural organizations worldwide. In addition to his quarterly articles for Farm Credit members, he regularly writes for Corn and Soybean Digest.
To ensure that this younger generation of producers is ready for the challenges of the next decade, the Farm Credit System and others have made a concerted effort to provide educational venues covering a wide range of subjects for a diverse set of business models.
Recently a number of people have asked me what megatrends will evolve in agriculture throughout the remainder of the decade. Observations and interaction with players in the industry have allowed me to not only identify trends but more importantly see how individuals and businesses are empowered to capitalize on them.
Society and the world have become more fragmented by information and technology, which tends to create a loss of focus. In a world where economic volatility and speed of change are accelerating, the opportunities for success are plentiful; however, the opportunities for failure are also abundant. Proactive, strong leadership is essential to maintain focus.
Anyone involved in agricultural decision making needs to keep the emerging markets, often called the BRICS nations of Brazil, Russia, India, China, and South Africa on their radar screen. These nations have represented 50 percent of world economic growth since the year 2000, and therefore have contributed to increased global demand for food, fiber and fuel. The growth of these nations has resulted in a “Swiss cheese” agricultural economy.
Despite recent misconceptions on social media about future opportunities in the agriculture industry, there are many reasons to be optimistic, as an industry that is the foundation of the American economy and lifestyle. Here are my top ten reasons to be excited about agriculture, in no particular order.
Whether it is a young farmer or rancher starting from scratch, a growing and expanding business, a business in transition, or a business that is scaling down or exiting, a team approach between the borrower and lender is a vital element for success. Let us examine the attributes of a “cut above” producer-lender team.
It is not often one gets to return to their alma mater to be part of a distinguished panel to address the future of agriculture and rural America. Cornell University, in Ithaca, New York, overlooking Cayuga Lake, one of the Finger Lakes, was the backdrop for this production. I spent three years and six months here earning my Masters and Doctorate degrees. I shared the panel with Dr. Kathryn Boor, Dean of the College of Agriculture and Life Sciences, and Mr. Chuck Connor, President and CEO of the National Council of Farmer Cooperatives. The panel was moderated by one of my former classmates, Mr. Bill Lipinski, CEO of Farm Credit East. Let us explore some of the thoughts and perspectives shared that day.
A convergence of events including the slowing of the emerging nations’ economic growth, an easing of ethanol and biofuel mandates, and favorable weather patterns in the southern hemisphere are resulting in increased crop inventories which in turn are reducing prices of commodities. Producers who have not developed and executed risk management plans using forward pricing, options or puts are now experiencing the possibility of negative margins for the first time in many years. Analogous to a baseball game, the grain industry may be in the seventh or eighth, or late, innings of the economic cycle.
The great commodity super cycle has brought high levels of prosperity, particularly to the grain sector of agriculture. Yes, economic moderation is now in motion and few analysts can predict its extent and duration. Emerging nations’ economies, biofuel and ethanol mandates, Federal Reserve policy and weather are several of the catalysts for change. While economics is uncertain, one fact remains constant: Those who plan, develop strategies, execute them, monitor results and tweak the business as field conditions change have the odds in their favor. Now let’s examine some of the top priorities for every producer’s game plan.
With U.S. University and college debt exceeding $1 trillion, and major questions concerning quality of education and the difficulty of securing employment for the Millennials, this is a topic that is top of mind. As an educator who has taught over 10,000 students at Virginia Tech and Cornell University, let’s have some dialogue on this important subject.
The phrase “willingness to repay” may be simple, but it has powerful implications in today’s challenging and changing agricultural economic environment. Referred to in agricultural credit training manuals, the willingness to repay is viewed by many seasoned lenders as a critical factor in accepting or denying credit. In one of our recent Farm Credit University courses, a young lender wanted the instructor team to expand on this variable and provide a more definitive meaning. Exploring this concept in depth, there are several ways to ascertain whether you, as a borrower, are a good bet for repayment.
Goals are one of the basic components of a business plan. This is a transitional time of the year, often spent reflecting on the past and planning for the coming year and beyond. Establishing goals is a multi-faceted task involving the business, family and one’s personal life.
If you enjoy reading Dr. Kohl's articles, you may find our articles by Danny Klinefelter helpful too.
Find more articles about our local ag industry when you read issues of our Leader magazine.