By Matt Gunderson, Assistant VP –Farm and Ranch Management, Farmers National Company
Agriculture is certainly tied to the weather and the saying “give it five minutes, and it will change.” It has been more than five minutes since the all-time grain highs of 2013, and oh, how things have changed.
Higher input prices, machinery costs and certainly land purchase costs combined with lower commodity prices make for an interesting situation. In today’s electronic age with markets trading at a faster rate and reaction to occurrences happening faster than ever, the opportunity for producers to capture rallies may not stick around for long.
Capturing profit in a down market is tricky, but it’s possible depending on how a producer manages in tight margins.
Why this downturn is different from the last
All segments of agriculture have seen belt-tightening in the past several years. Agricultural producers are less diversified than they were during the last downturn in the agricultural economy. Many have been farming for one to two decades and haven’t experienced anything like this. All of the items mentioned above, combined with rising interest rates and concerns about trade, create an interesting dynamic.
What are the current indicators, thoughts and decisions being made when it comes to the current farm economy and directly to agricultural producers? Does this have the makings for the 1980s all over again, or just a part of it, or none of it? How do rising interest rates come into the profitability equation? How can professional farm managers and agricultural consultants recognize financial stress in operations, and what effects can this have on the farm operator’s ability to pay rents or produce a crop?
The opportunity despite current challenges
All of these questions and more are going to be assessed, dissected and discussed at the American Society of Farm Managers and Rural Appraisers’ (ASFMRA) Education Week during a focused one-day workshop on Tuesday, June 26, 2018, at the Marriott Downtown in Des Moines, Iowa.
Topics and speakers for this seminar will include:
- Assess the current farm economy with Cortney Cowley, economist at the Omaha, Neb., branch of the Federal Reserve.
- Analyze farm and ranch operations during tight margins with a leading agricultural banker. This presentation will share the benchmarks and indicators that bankers currently look at when they’re studying balance sheets, profit and loss statements and cash flows.
- How does USDA view the current situation? What USDA programs are available? Hear answers from a key leader at USDA.
- What role will the new farm bill play? Hear the latest farm policy insights shared by Stephen Frerichs of AgVantage, LLC.
What tools were used during the 1980s, what tools are available now that weren’t available then, and what is different today? How can you develop an effective toolbox of options? Hear from a panel of speakers, mentioned above, as well as leaders in the farm management industry who have experienced economic cycles in agriculture.
Maximize the positive impact of change
Certainly everyone in agriculture has tightened and continues to tighten their belts. Learn how they are doing it, and learn tools that are available to you to better assess and plan now for the brighter days ahead. Give it five minutes, and it will change!