The Farm Economy

combine and field

As the seasons change, so comes another harvest nearing an end. After harvest, many farmers will start to compile their farm records, perform year-end tax planning and plan for the upcoming year. The farm economy has seen its share of challenges and farmers continue to search for ways to remain viable after multiple years of declining profitability.

On Thursday, January 18, 2018, Citizens Bank Minnesota is hosting a seminar with nationally known speaker, Dr. Michael Boehlje, Professor Emeritus in the Department of Agricultural Economics and the Center for Food and Agricultural Business at Purdue University. He previously held faculty and administrative positions at Iowa State University, University of Minnesota and Oklahoma State University. Dr. Michael Boehlje has devoted his career to helping farm and agribusiness managers and policymakers understand the pragmatic economic and financial consequences of their decisions.

The fundamental focus of his work has been to integrate concepts of economics, finance and strategy to solve problems of farm and agribusiness managers. A major theme of Dr. Michael Boehlje’s research, writing and lecturing for the past 10 years has been the importance of strategic planning and thinking, and positioning the firm for long term viability and success.

The following are a few of his recommendations he calls “Elements of Best in Class”:

1. Intense Cost Control
-Efficiency/productivity is critical
-Know your cost components per unit sold

2. Margin Management
-Know your costs of production
-Know your margins

3. Execution
-Timely operations
-Details, details, details

4. Buying Right
-Compare supplier offers
-Consider repairing rather than replacing

5. Managing Operating Risk
-Technology performance –pest control, fertility effectiveness/loss, seed selection
-Marketing/pricing of inputs and products
-Government programs and crop insurance participation

6. Debt/Capital Management
-Maintain working capital
-Reduce capital expenditures
-Don’t surprise your lender

7. Simplification/Automation
-Complexity creates confusion/mistakes

8. Do Fewer Things Better
-What is your hedgehog –what do you do better than anyone else?
-Focus and intensify

9. Data Management
-Collect efficiently
-Capture the insights
-Think carefully

Citizens understands the uncertainties of agribusiness and can help you plan your operation throughout the year.

We look forward to seeing you at our upcoming seminar featuring Dr. Michael Boehlje! Watch for more information about the seminar coming out soon!

By: Scott Tauer, Vice President – Loan Officer

https://ag.purdue.edu/commercialag/Pages/Faculty-Staff/Boehlje.aspx

“THE FARM ECONOMY AND THE FUTURE OF AG LENDING” by Michael Boehlje
Center for Commercial Agriculture, Purdue University and Senior Associate Centrec Consulting. West Lafayette, Indiana, August 7, 2017.

Equal Housing Lender - larger

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: