Questions From Cyberville
Dr. Kohl
Blocks with question marks


It’s interesting how the movement from face-to-face presentations since mid-March has resulted in reaching new audiences from many areas of the country. The following are a few of the interesting questions asked during a webinar by agricultural producers and agribusinesses in “cyberville.”


What is the best farm and ranch investment strategy right now?

In order to best answer this question, one must explore your goals and tolerance for risk. A balanced and diversified portfolio consisting of real estate, stocks, bonds and cash usually stands the test of time. A solid financial liquidity account for personal, family and business expenses should be a point of emphasis.  Liquidity is a blocking strategy in case of adversity, such as a macroeconomic event like the COVID-19 pandemic, internal business issues, extreme weather or other unusual business events. Working capital can also be utilized to take advantage of opportunities on a timely basis. On the personal financial side, it’s recommended to have four to eight months of living expenses as cash. On the business side, working capital of 20% to 25% of total expenses positions you well.


Could technology become the next black swan?

The more an industry or business relies on technology, the more susceptible it is to grid failures and internal or external terrorists. A cyber or electrical grid issue could wreak havoc on the high-tech consolidated agriculture industry. This is why many organizations have spent copious amounts of time and money to build proactive systems to counter potential adversity. The effects of the COVID-19 pandemic on many industries is a prelude to possible future black swan events. 


What do you see in the future for consumer preference and behavioral shifts?

Over the next few years, COVID-19 will accelerate changes in consumer preferences. Some call it “seesaw consumption,” meaning demand is here today and gone tomorrow. An agricultural business serving the consumer must consider the balance between optimization and efficiency versus diversification and agility, both on the supplier and marketing side. The consumer of the future expects product transparency. They want sufficient supply and often purchase an experience in the decision-making process. For those exporting products, the global cultural, societal and political shifts must be proactively observed.


What are your thoughts on supply and marketing chains?

This is an area that represents much risk to the agriculture and agribusiness community. One only has to observe congressional hearings on technology, medical suppliers, manufactured goods and services as a prelude to some of the things that will happen to the agriculture industry. Supply and marketing chain risk, along with deglobalization, will potentially be as big of a disruptor in agriculture as COVID-19 or the growth of Amazon in the general economy.


One of our 4-Hers may be a future economist. What would you recommend they do to prepare?

Let's go back decades ago to my childhood. Some of the best hands-on training that I received in preparation for my career was keeping enterprise budgets on 4-H and FFA projects and preparing for state and national contests. One project was to go with my parents when they visited their agricultural lender. I reported back to the 4-H and FFA groups with the discussions that occurred. They discussed milk prices, expenses, machinery investment and land costs. This little crew cut kid in the corner was not distracted by technology but was observing the conversations between the borrower and lender. Maybe more of this hands-on training should happen today!


Comments? Please send your remarks to I would like to know what you are thinking.


Ag Economist Dr. Dave Kohl

Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University. Dr. Kohl has traveled over 8 million miles throughout his professional career and has conducted more than 6,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA, and regulators, as well as producer and agribusiness groups. He has published four books and over 1,300 articles on financial and business-related topics in journals, extension, and other popular publications.


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Sturgeon Bay Branch Temporarily Closed 7/28 & 7/29

Due to a lightning strike, the Sturgeon Bay building is experiencing network issues and will be closed until it is resolved. Staff are working remotely and continue to be available by phone and email.