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January 11, 2024
It is hard to believe the year 2024 will take us to the quarter-century mark! While many challenges loom on the horizon, there are also opportunities ahead in the New Year for those willing to position for success.
2024 will be a year of global elections. Over one-half of the world’s population, including the United States, will go through a major election process. The results of some elections, such as those in authoritarian countries, will be predetermined, while others will be decided by razor thin margins full of controversy and speculation powered by both mainstream media and social media.
This year, expect an acceleration of artificial intelligence (AI) technology. This form of technology will have the capabilities of human thought, similar to a human IQ of 120. In another four years, the capabilities of AI could increase ten times to the equivalent of a human IQ over 1,200!
The term recession will be prevalent in many economies globally and perhaps in the United States. China's economy will continue to struggle due to demographics, youth unemployment, a housing slump, a decline in exports, and high levels of debt. Europe will be on a “recessionary edge” as it struggles with energy, a decline in exports to Asia, and the wars in Europe and the Middle East.
The U.S. economy will be walking a “recession tightrope.” Large amounts of federal debt buildup, higher interest rates, and stubborn inflation will reduce consumer investment and confidence. Of course, the erosion of governance through the election cycle will damage economic expectations. However, economic incentives to gain votes will be prevalent, similar to previous years when a presidential election occurs.
“Greenlash” will be a term that will see increased discussion as the struggle between fossil fuels and green energy evolves. The reality of green energy has many unintended consequences ranging from issues related to electric vehicle infrastructure to consumer acceptance. The unintended consequences and the resulting “greenlash” will accelerate toward the quarter-century mark if we were to see an economic downturn.
Despite all of the challenges, opportunities are just as plentiful if one develops, executes, and monitors a business plan. In the future, focus on the following:
Write down your short-run and long-run goals.
Develop a balance sheet and projected cash flow, which incorporates the operational plan, at least quarterly.
Establish a marketing and risk management plan. Follow through by executing and monitoring the plan.
Focus on building and preserving working capital with cash reserves. Twenty-five percent of business expenses should be in working capital. Maintain at least four to six months of total household expenses in cash.
Develop a deliberate educational program and form a team of advisors.
Management will need to go the extra mile in 2024. Remember, there are very few traffic jams in the extra mile!
The opinions of David Kohl are not necessarily those of Farm Progress.
Contributing Writer, Corn+Soybean Digest
Dr. Dave Kohl is an academic Hall of Famer in the College of Agriculture at Virginia Tech, Blacksburg, Va. Dr. Kohl has keen insight into the agriculture industry gained through extensive travel, research, and involvement in ag businesses. He has traveled over 10 million miles; conducted more than 7,000 presentations; and published more than 2,500 articles in his career. Dr. Kohl’s wisdom and engagement with all levels of the industry provide a unique perspective into future trends.
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