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Corn+Soybean Digest

Changing Rural Landscapes

This past week I was in Hutchinson, MN, and Fargo, ND. As I drove from the Twin Cities to Hutchinson on Route 7 and then Route 15 to catch Interstate 94, it was amazing to see how the landscape was changing.

There were fewer dairy barn lights and more of those farms moving to cropping enterprises. The closer you get to the Twin Cities, the more horses and lifestyle farms you observe. When driving North on Route 15, this area that used to be in dairy has now become primarily crop farms, and large crop farms to boot!

Land values are still very strong in this area supported by the tax exchanges from the Twin Cities.

I am impressed by the Chamber of Commerce in Hutchinson, which has worked with lenders and agribusinesses in the area to promote and educate the farm customer. 3M has thrown its support in as well, because the company realizes a vibrant, rural community starts with strong agriculture.

The subject of ethanol has been raised in both meetings. This industry is in an over-capacity situation currently. Five mistakes can make an investment in these plants by producers look like an investment in a dot-com on Wall Street.

  • Producer only board

  • Under-capitalization

  • Lack of a market analysis

  • Under-estimating time to break even

  • Lack of an exit plan

That being said, ethanol is part of our national energy program.

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  • How can the CEO of Coca-Cola take a bonus with the company losing money?

  • Disneyland was looking bare in San Diego; the consumer is cutting back!

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

This online exclusive is brought to you by Soybean Digest

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