Dr. David M. Kohl

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Future Professional Farm Management Challenge
Dr. David M. Kohl Professor Emeritus
Agricultural and Applied Economics Virginia
Tech Blacksburg, VA 24061 [phone] (Jill
Albert) [phone] (Alicia Morris) e-mail
sullylab_at_vt.edu
Weekly Website Columns
Ag Globe Trotter www. farm-credit.com
Road Warrior of Agriculture
www.cornandsoybeandigest.com
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Producers Philosophies Practices That Stand
the Test of Time

• know the cost of production
• asset lite strategy
• capital human
• managing for the extremes
• cash working capital
• grow earned net worth 6 annually
• enterprise analysis
• increase profit by 2
• use accountants advisory boards to double
  profits
• focus on efficiency first, then growth, in
  business turnaround
• producers bankers that use a strategic plan
  double rates of return
• early adopters trend setters earn 1.5 times
  profit
• three supervisor rule

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Selected BMPs
Financial Performance
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Selected BMPs
Financial Performance
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Summary Statistics
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Transition Planning Management Practices
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Technology Adoption

• Minnesota innovators are least profitable (4.71
  ROA)
• Northwest innovators are most profitable (6.61
  ROA)

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Communications, Business Family Issues

• Producers who communicate are 21 more profitable
• Northwest producers who separated business
  family were 63 larger had 22 percent more net
  income.

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Business Planning

• As farms become bigger and/or more leveraged,
  more business planning is necessary

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Growth Philosophy

• Objective growth is critical the bigger you
  become in Northwest
• (25 more profitable)
• Objective growth in Minnesota was critical as the
  producer incurred more debt

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Accounting Expertise

• Data for Northwest only
• No differences in Minnesota data because of farm
  management instructors

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Philosophy on Estate Planning
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Retirement Investment Vehicle
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Insurance Risk Management Coverage