Be Prepared For the ‘Winter’ of The Farm Economy

It’s no secret the farm economy is in a downturn. Have you ever compared the cycles in the farm economy to the seasons of the year? Ag Economist Dr. David Kohl does.

“That period from 2006 to 2012, she was the summer,” he explains. “High commodity prices in every major commodity.”

He then says the period from 2013 to today is what he considers to be the Fall season.

“In other words, commodity prices are in an elongated kind of reset,” he says. “People have been pretty resilient because they had built up working capital and of course land values who were strong, so we had some equity on the balance sheet.”

Unfortunately, Kohl says 2018 to 2021 is going to be like a cold winter.

“What I'm starting to observe in this winter period is that I've got a certain group of producers that have made adjustments and they're making a little money,” he explains. “I've got another group, I call them kind of the bridge, and they’re looking for a refinance. Then I've got another 30 percent of producers out there at the end of the pier and those people burning through land equity etc.”

Fortunately, spring is coming.  He anticipates it to be somewhere from 2021 to 2025.

“I call it the spring of the year because what will happen is we'll weed out the some of the inefficient, some of the less progressive type of managers,” he says adding those businesses will be purchased by the other 40% of producers.

“So we're going through these four seasons, and this is the elongated downturn,” he says.

Listen to Pam Fretwell’s full interview with Kohl on the Top Producer podcast below.

Comments

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
Submitted by Jessica Kevin on Thu, 11/30/2017 - 07:34

Extreme climate challenges every one of us. Exercises that we underestimate can wind up plainly troublesome or even risky when serious climate happens Do my Assignment Cheap In any case, by making some basic strides you can diminish the effect of such occasions.

Submitted by William riley on Sat, 12/23/2017 - 01:46

volumes of normal material in the earth, especially if considering the additional manure supplements occurring as a result of supplemental supports commonly provided for steers brushing corn store. Custom Essay Help UK Likewise, the foot action from chomping dairy cows could help join development into the earth, turning away photo-oxidation and in this way benefitting soil normal material.

Submitted by rebeccahickshq on Sun, 01/07/2018 - 04:59

Thank you so much for sharing such useful and interesting information. Your website is highly effective and contains worthy content. I find it more enjoyable than any other show.
bloons tower defense 5

Submitted by Kristin Smith on Wed, 01/24/2018 - 05:55

Great talk I would love to live the country life, sometimes I guess! Good advice also God bless. best write my essay!

Submitted by Abdul Kaleem on Mon, 01/29/2018 - 03:20

Thanks for sharing the nice topic and I read the content who is very interesting and also such a very useful information. Thanks for sharing the post. Visit them MBA project help

Submitted by Ahmed Khan on Thu, 02/01/2018 - 07:13

This post is very informative for everyone and also I get useful knowledge about the Farm Economy. Thanks, author keep posting this types of unique articles because it is very helpful for me. I am a professional content writer so that's why I need the unique knowledge for the content.

Submitted by happy wheels on Wed, 02/14/2018 - 03:11

How long does it take to complete this article? I have read through other blogs, but they are cumbersome and confusing. I hope you continue to have such quality articles to share with everyone! I believe a lot of people will be surprised to read this article!
happy wheels