The Ag Globe TrotterDr. Dave M. Kohl
Welcome to the weekly edition of The Ag Globe Trotter by Dr. Dave Kohl.
Engagement with lifelong learners in the agriculture industry provides a venue to gain wisdom on a wide variety of topics. While some of these nuggets are directed towards young farmers and ranchers, many are appropriate regardless of your demographic or size of operation. Let's dig into some of the fan favorites.
Cash flow: a tool of the times
One observation with the younger generation of agriculturalists in particular is that they know the power of financials. A projected cash flow that is monitored monthly, quarterly or weekly can be a powerful tool, especially during inflationary times with volatile prices and markets. Financials must be analyzed more than once per year because the numbers are larger, the stakes are higher, and inflation accelerates changes.
Challenges make life interesting
Whether it is markets, weather, technology, or attempting to transition the business from one generation to the next, farming and ranching is full of challenges. Overcoming these challenges and developing a game plan to proactively avoid repeating mistakes can provide a recipe for self-confidence. This is why I often suggest businesses document their history in writing or with videos to share trials, tribulations and successes with the next generation. Athletic teams do this all the time to develop and evolve the team culture.
Follow the process
During a recent commodity price spike, one disciplined, middle-aged producer left $500,000 of net income on the table by following and executing his marketing and risk management plan. This was a difficult setback; however, he was quick to comment that following the plan and process allowed him to purchase farmland through profits every year but one in his 12 years of farming.
Confidence and humility
There is a great quote posted on one of my favorite agricultural lender's desk, “Confidence is arrogance under control with humility.” There is much to be said for this quote. Both my vocational agriculture teacher and basketball coach always told us to remember where we came from. Respect the front-line people such as secretaries, janitors, and bus drivers because they are often the first to open doors for you. Never forget the people that provide and assist you in life's journey and bestow the same to future generations. Some of the most successful farmers, ranchers, agribusiness people and lenders that I work with will exhibit confidence that sometimes seems to be a little bit arrogant. However, they know that their fortunes can change quickly and bring them back down to earth so they often have a humble approach. Steph Curry, his brother, and the Manning brothers are examples of confidence and humility in the athletic environment.
Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University. Dr. Kohl has traveled over 8 million miles throughout his professional career and has conducted more than 6,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA and regulators, as well as producer and agribusiness groups. He has published four books and over 1,300 articles on financial and business-related topics in journals, extension and other popular publications.
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