Farmers are facing the highest interest rates since the time of the flip phone, and debt is out of control globally. Virginia Tech Professor Emeritus Dr. David Kohl, who was on the program at the Ag Bankers Conference in Minneapolis, said farmers are burning through their equity. “If you really look at it, the balance sheet is strong, but it’s strong on the bottom in equity. It’s weak in working capital and liquidity.” As long as lenders are willing to refinance, Kohl said working capital will be okay. With intense competition from the Southern Hemisphere, a healthy trade environment is a must. However, Kohl said the damage done by tariffs cannot be repaired overnight. Kohl’s final message was all about relationships. “Agriculture is still about people. People, processes, and communication: the big three.” Listen to the interview.
