Strategies For The Economic Downturn Cont.

At the recent American Bankers Association Ag Bankers' Conference in Indianapolis

Dr. Dave Kohl, Globetrotting Emeritus ag econ professor from Virginia Tech shares five strategies for moving farmers and ranchers losses back up to break even or better.

Kohl: "Number one they are taking a pencil to cash rents for example on crop land, for example, they will be down $50 to $60 bucks an acre. Second thing, they are really taking a fine line pencil to input costs — that is all the way from fertilizer, feed, chemicals, etc. Sometimes what you have to do is you can cut the costs, but you have to put it in balance with production so we are seeing more soil test and doing the various things. Third element — family living withdrawals. The real smart ones, the proactive ones are out there putting a pencil to family living costs. In other words, can we peel off so much per acre or per animal unit. You know what the other one is? They are doing a better job of marketing and risk management. For example when that $4 corn came last June, they didn't wait for it to go to $5 to see $3 — in other words — they took advantage of that window. Then the other element — during that hot time in agriculture — boy we were moving towards specialization. Now we starting to see people looking at diversification income. Is there something we can do to bring in some few extra bucks here and there?"