Gauge Your Ag Operation’s Risk at AgViews Live 2023

Save the Date and Join us for AgViews Live

July 24 at the Delta Hotels by Marriott Fargo, 1635 42nd St. S.W., Fargo, N.D.

July 25 at the Sioux Falls Convention Center, 1201 Northwest Ave., Sioux Falls, S.D.

July 26 at Glacier Canyon Lodge, 45 Hillman Rd., Wisconsin Dells, Wis.

Contact Kelly Hegney at 701.451.7536 or [email protected] to register by July 12.

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Even though the ag outlook is currently bright, it’s important to stay vigilant. Find out what to monitor, what to ignore and how to position yourself for success – no matter what lies ahead – at AgViews Live, Bell Bank’s popular and FREE ag seminar.

From the “black swan” events of the last few years to the “gray rhino” charging straight for us, Lynn Paulson, Bell’s director of agribusiness development, will explore why now is not the time to get complacent – despite some pretty profitable years in agriculture.

While a “black swan” is an unpredictable event that has the potential for severe consequences (like COVID), a “gray rhino” is a highly probable event, with a great deal of potential impact, that’s often overlooked. Despite the obvious danger charging straight at us, we may not be taking it seriously enough. Lynn explains which downside risk fundamentals to monitor while offering tips for keeping your eyes on the business dashboards and gauging early warning indicators.

Ag finance author and speaker Dr. David Kohl will show you how to manage global and domestic economic trends to increase your odds for success with the “five-percenter” business model.

“Often, the top 20% of successful business owners are the ‘five-percenters’ – the business owners who are about 5% better at management basics than other business owners,” David notes.

In advance of AgViews Live, we asked David some questions about ag finance, management tips and key factors affecting ag.

Q: In the past several years that you’ve been speaking at AgViewsLive, what are the biggest ag finance changes you’ve seen?

A: Inflation has been overwhelming, and the amount of paper wealth that has occurred is astounding. Increasing land and asset values have been among the biggest changes. Operations have become bigger businesses with bigger numbers. Business success and failure can occur quickly with big numbers. Interest rates were 0-bound when we started AgViews Live, and now they’ve exploded. That’s a big change.

Something I’m seeing around the country is more young people and women are attending ag conferences, and audiences seem very engaged. That’s really refreshing.

What key lessons should we have learned over the past several years that we can apply now?

1. Geopolitical risk is high and can ‘flip the switch’ on commodity prices over night.
2. There’s no ‘next big thing’ – that’s why we don’t have venture capitalists in ag. A few years ago, it was all about hemp, but then not much happened.
3. When businesses get into difficulty, it’s not their equity but their liquidity or working capital that makes the biggest difference.
4. Prosperity is bigger than dollar signs. People are often in business for their families and legacy. That’s a key lesson we need to remember.

What key management tip should producers adopt to prepare for the next economic downturn?

It’s about being 5% better in a lot of areas. If you look at people who are successful in the long run, they’re not trying to hit a home run on the market or their yield. Instead, they’re a little bit better at production, marketing, risk management, efficiency, finance and human resources. Those small improvements compound over time.

Besides raising interest rates, what needs to be done to control inflation?

The U.S. government needs to cut spending. Our $31 trillion federal deficit is way out of control. High debt could mean less government support for agriculture. It also influences our borrowing costs, which are getting to a critical level.

Why are land values so strong and seemingly resilient??

It’s a secure investment. Those buying farmland are 40% Baby Boomers, 40% growing farmers and 20% athletes who are buying it and renting it out. While land values may level out, I don’t expect them to drop like they did in the 1980s – mainly because the people buying land are Baby Boomers with strong balance sheets.

What do producers need to know about Environmental, Social and Governance (ESG) policies?

It may slow down if the economy slows down, but it’s still there, driven by activists, investors and big corporations. Agriculture is doing a lot of positive things in ESG, and we need to be telling that story – with ag groups joining together across industries.

Global Factors Influencing Agriculture

Is China still a large importer of U.S. ag products?

There are two factors that really sway ag – the weather and China. Depending on the commodity, China is our largest ag trade partner, but China is in a growth recession – still growing, but not in the double-digits of years ago. China is also looking to trade more with Brazil than the U.S. I always say, “Don’t bet your farm on trade with China.”

Another thing to watch is China has been on COVID lockdown for three years, and its citizens have saved $2.7 trillion. If they start spending, oil and gas prices are going to rise.

What is the impact of the Russia-Ukraine war?

Russia’s playing the long game. The strategy is to crack western support for Ukraine, and China is watching how it all plays out. Food inflation around the world is still keeping inflation up across the globe. Europe dodged a bullet this year because winter was mild. If had been cold, our fuel prices would be a lot higher.

What are your thoughts on oil and energy prices and production?

The transition from fossil fuels to green energy takes a couple of decades – otherwise it creates energy instability. Green energy also has to be profitable without government influence, or it’s very inflationary.

Where are we in terms of a global recession?

Germany is in a recession. The rest of Europe is barely above recession levels. In the U.S., people are still spending money. Government spending has kept us out of a recession, but we’ll pay the consequences in a year or two.

What else should people know about AgViews Live?

I always look forward to Bell’s ag conference. I’ve even had people asking me about it at events around the country. I would really encourage anyone in FFA or 4-H to attend. I’d also tell any adults planning to attend to bring a kid, grandkid or neighbor. Instead of measuring success by dollar bills, measure it by the impact you make on the next generation.