Category Archives: International agriculture

Ag: What’s Around the Corner & Down the Road

In December, Dr. David Kohl, Professor Emeritus from Virginia Tech spoke at the Farmers and Ranchers College.  Dr. Kohl always has great insight and for those who read his articles, it’s extra special to hear him fit what he knows and sees all together into one talk!  He moves fast and my pen was flying but I’ll do my best to summarize some key points I took away.

Dr. Kohl talked about how to become a “cut above super producer”.  Essentially much of this comes down to a profit plan (60-30-10) where 60% of profit focuses on efficiency then growth.  One way to do this is to focus on doing better before you worry about getting bigger.  30% needs to build working capital. The final 10% he says to do what you want with it but don’t let 10% become 60%.  Dr. Kohl shared a statistic where 19% of producers (85% of whom were grain producers) who had an income of around $85,000 spent 1000% on living expenses.  I heard a similar remark from Tina Barrett with the Nebraska Farm Business Association at a different meeting.  Producers need to know what your family living expenses are and get them under control.

He also shared some questions regarding working capital for producers to consider.

1) Is your inventory protected? 2) How long will inventory take before it becomes cash?  3) Are contracts/receivables good?  Know who you’re doing business with.  He gave several examples of how those with too much debt took others under with them.  4) As you’re writing a lot of checks out now for prepaids realize you won’t see financial capital for 8-12 months.  Thus, how much working capital is absolute cash?  He recommended having at least 1-2 months available.  5) Look at your lines of credit and payables.

Dr. Kohl gave a stat that there’s a 500:1 odds of a business making it to the 5th generation.  Some qualities of a long-lived business include strong sense of core values, frugality, transition/planning (and he emphasized this is not an estate plan), professional development (1% of revenue should go to employee improvement and development), and building relationships.  He also shared the primary pitfalls of transition being the younger generation taking over an unprofitable business, younger generation acquiring rusted out, worn out and faded out assets, and assuming non-farm sibling(s) has/have no interest in farm assets.

There are many reasons to be optimistic about agriculture as well.  By the year 2050 we need 100% more food, fiber, and fuel and 70% of that will come from new technologies.  One in six jobs is related to agriculture.  There’s a place for everyone-conventional, natural, organic, local-just know that they all won’t do the same in feeding the world.  It was a very interesting presentation!  You can read another perspective from Brandy VanDeWalle’s blog!

Visit from Chinese Agronomists

Last week I had a neat experience in speaking to a group of agronomists from China about Extension.  They are in the U.S. for 10 days and are interested in high yield corn production.  I scrapped the presentation I had been asked to present as they had so many questions about our Extension system.  So we started in a discussion…how do we set up a field day/meeting in Extension?  How do we let farmers know about them?  How do we decide what to talk about? Thus ensued a discussion of farming in China vs. farming in Nebraska.  In China, many of the fields are hand-planted and less than 10% of their farmers have internet connectivity.  In Nebraska, we’re seeing the trend of larger equipment and the majority of our farmers are connected to the internet.  I suggested that they start with field days and meetings which shared the research-based information they are generating at their research sites.  Advertise to farmers via word of mouth, radio, newspapers, direct mailings, or brochures/flyers left at common gathering spots.  Once they have the people at the meetings, they can follow up with a survey to determine needs assessment for what the farmers would like to know more about in the future to determine future meeting topics. 

Extension in Nebraska has greatly changed in my 7 years regarding how we share information.  We are challenged today to reach a broad audience who on one hand primarily finds information from newspapers  to the other hand, primarily from the Web-and everywhere in between! This year, I’ve worked at trying to share the same information 7 different ways to reach a broader audience.  I showed the agronomists from China the impact of the Web and social media in sharing information in Nebraska.  They were amazed! 

We then went on a tour where they were able to view harvest.  It was fascinating watching them excitedly discuss and question no-till farming as they were digging through residue and in the soil.  They also predicted corn yields by measuring and counting and comparing that to the combine yield monitor.  Some enjoyed getting into the combines and learning about the precision ag tools available to farmers.  It was a neat experience and I learned much from our visitors as well!

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