Economist Kohl on what ag producers need to know and do
Washington Ag Today November 23, 2009 You have probably heard it before, know your cost of production. That was one of the basics agricultural economist David Kohl told last week’s Washington Association of Wheat Growers convention. Kohl: “One of the things your lender is going to ask you is what is your cost of production, because if you don‘t know your cost of production you can‘t what? Do an objective marketing plan. You get on to an emotional binge. By the way many of you have multiple enterprises. Might have a few beef cattle and then you have a grain enterprise. Do you know your cost of production by enterprise? By knowing you cost of production you know what it allows you to do? Put your emphasis where you get your biggest bang for the buck.” Kohl said if you have sons or daughters involved they better know the cost of production too. The retired Virginia Tech ag economist said producers need a three pronged risk management program that would cover revenue, inputs and interest rates. Kohl also emphasized having a business plan. Kohl: “Here is one of the things about a business plan it is not concrete. One of the things is it is something you pull out and refer to and it will evolve. It will take you 30 hours. I am working with two families in Kansas right now on their business plans on their farms and ranches and they said, oh boy doing this business plan is like a root canal.” Kohl also said that cash is going to be king and to be liquid. He sees agricultural land as a good investment. I’m Bob Hoff and that’s Washington Ag Today on the Northwest Ag Information Network. ?
