During a time of high commodity prices, rising land values, and government payments, a percentage of farmers became complacent. Virginia Tech Professor Emeritus Daid Kohl made that point during the National Bankers Conference in Omaha. “You’re going to have a certain set of customers that are going to burn through working capital, liquidity and their equity, but you’re going to have another set of customers that will put profits on the table, build liquidity, build equity and they’re going to grow.” In this time of extreme volatility, Kohl said commodity prices could drop quickly. That makes it more important for farmers to know their breakeven costs and manage risk. The geopolitical environment can make changes in an instant. “Whether it’s China, the United States or the Federal Reserve, they’ll flip the switch and when change happens, it will happen very, very quickly.”
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