The agriculture and rural economies have been the shining stars in a lackluster U.S. economy. There has been tremendous demand for food, fiber, and fuel powered by the economic and population growth of emerging nations, which has represented approximately 50 percent of the world’s economic growth since the year 2000. In turn, profits and asset appreciation have accounted for over a $1 trillion increase in wealth in agriculture and rural America.
This prosperity has attracted a new set of players and new energy to the agriculture industry, including young people under 40, women, and minorities in certain regions of the country. While agriculture, farms, and ranches represent just slightly over 2.3 million people, the agricultural footprint is wide, representing one in six people directly or indirectly employed by the agricultural industry. These new players along with experienced agriculturalists are capitalizing on the convergence of information, engineering and biotechnology, three sets of technology in a system that accelerates the bottom line. It is not “one size that fits all” in this new world of global economics.
Local, natural, or organic operations are energizing emerging business models that require entrepreneurship and small business management acumen as they serve niche markets in the U.S. and abroad. The traditional farm is alive and well, focusing on efficiency with modest amounts of debt and family living withdrawals. Often producers involved in this segment respond that the best crop they will raise will be their children and grandchildren, or those whom they mentor. Yes, the large complex farm family business operated by multiple family members and sometimes outside partners is a growing segment that requires superior management also.
Yes, agriculture has a strong pulse, but it operates in a very fragile economic environment where an increase in interest rates, government policy change, slowdown of the growing emerging markets, or an unusual or unexpected event can change game conditions significantly. The opportunities abound for those lifelong learners who think globally but can bring their ideas down to reality on a local level.
For 25 years, Kohl was Professor of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Tech. Kohl is Professor Emeritus in the AAEC Department at Virginia Tech. Kohl has addressed the American Bankers Agricultural Conference for over 30 consecutive years, and has appeared before numerous state bankers’ schools and conferences throughout the U.S., Canada, Mexico, and the world. Dr. David Kohl is presenting at the annual Ag Breakfast at the IBA Annual Convention on September 16.