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Corn+Soybean Digest

Teachable Moments in the Last 18 Months: Part 1

Wow, the last 18 months economically have been like a top-rated football program with high expectations that have come tumbling down. A surprise around every corner can be turned positive, similar to a stellar team bouncing back from a losing streak. What are some of the teachable moments for farm and ranch businesses and families?

First, cash, liquidity and having a deep “war chest” of financial reserves is not an option, but a requirement. Lending sources dried up like a stream in the midst of a major drought. Jobs and overtime hours were cut back or eliminated, placing strain on households and businesses.

Financial gurus such as Suze Orman and Dave Ramsey recommend saving six to eight months of household cash or living needs to weather economic setbacks. I second their advice. Many livestock producers only wish they had built a financial liquidity cushion with prices declining to record lows while input cost remained high. Grain producers, ask yourself this question: “What if the grain industry goes into the same cycle the livestock sector?” Have you built your financial and economic second team for the depth chart?

Next time we will explore other lessons learned from this tough season of economics and finance.

Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at

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