Kohl Urges
(Continued from Page 18)
areas with failing farms. Ninety-five percent choose
communities with thriving schools and retail centers,
rather than places where the high school has closed,
equipment dealers have shut down, and most of the
population is older people, Kohl said.
Kohl outlined some generational differences that
may help in understanding family farm dynamics. For
example, Gen-X’ers tend to have a more “balanced”
approach to work in contrast to the “driven” work
ethic of some of their elders. Gen-X’ers also tend to be
more skeptical in their outlook compared to the opti
mistic tendencies of their parents, he pointed out.
Dairy operations, like other businesses, need a net
income growth rate of at least five percent to be sus
tainable but managers should aim for eight percent
growth to cover inflation and other variables, accord
ing to Kohl.
One problem, especially with dairies in the East, is
that “producers become too spinster,” Kohl said, re
ferring to an unwillingness to risk money on the opera
tion. Dairy producers in the East tend to have equity in
their operations ranging from 40-80 percent compared
those in the West, where equity runs from 30-50 per
cent.
Some West Coast producers can also get into trou
ble with rapid growth, Kohl noted. When equity dips
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under 50 percent, “That is called ‘you better have
your linebackers in place,’” he said.
He also touched on the implications of the Farm
Bill, including the new dairy subsidies.
“It’s really opening up a can of worms,” he said of
the dairy program. The effect on supply and demand,
he said, will prove “not good for ag in the long run.”
According to Kohl, “The Farm Bill is basically plug
ging a hole in the dike,” by maintaining cash flows and
keeping land values up. Land values in the Midwest
would decrease 22-28 percent without the Farm Bill,
he pointed out.
The farm commodity subsidies also create a “flash
point for international trade wars,” he said.
According to Kohl, the new bill brought no “major
changes” to ag policy for now, but set the stage for
future farm bills to be “very environmental.”
“Environmental issues will intensify tenfold in the
next Farm Bill,” he predicted.
The meeting also featured a presentation by Dr. Jef
frey Brose, technical service specialist with Monsanto
Dairy Business.
Brose highlighted the need for dairy producers to
make the most of their facilities and to think of cows as
production assets.
“When (producers) are hesitant to fill a barn, it’s
much more costly to have that barn empty,” Brose
said. “Keep the slots filled with the most productive
animals.”
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