Friday, October 24, 2008

The Credit Crisis and Agriculture

We've all heard the word "bailout" way more than we need to. Hearing it is a reminder of the economic problems we now face and what caused those problems. The credit markets are in turmoil predominantly because of the so-called "subprime" mortgage mess. But, what does it mean for agriculture?

With limited amounts of credit to provide, lenders will be looking for safe debt. Who is most likely to pay? Without direct government intervention, I don't believe that agriculture will be any different. As a farm operator, you will need to show your lender(s) that you are a safe bet. Clean up your credit report, be sure that you can cash flow your business operations, and make sure your balance sheet is in order. Talk to an accountant about ways to position yourself to be a better credit risk.

If used correctly, debt is a powerful tool that allows you to make money by using other people's money. So, avoiding debt entirely is unwise for most farm operations. But know how to manage your debt. If you do, you should be able to weather the storm.

Monday, October 20, 2008

Gluten-free Sales

Are gluten-free products a new direction for your business?

According to the article "Gluten-free Sales Jump More Than 20%", there are about 3 million Americans living with celiac disease. Celiac disease is a digestive and autoimmune disorder that results in damage to the lining of the small intestine when foods with gluten are eaten. Glutens are a form of protein found in some grains.

Gluten-free product sales have reached over $1.3 billion dollars in the past year. Read the article below and tell me what you think. Would you consider selling any gluten-free products?

Gluten-free article

Friday, October 10, 2008

Economic Conditions

As I write this, US stock markets are down ANOTHER 3.5 - 4.5%; This following a brutal start to October in which the Dow is down about 21% on the new month. Every day this week I've told myself we have to hit bottom soon. Who knows where that will be?

This has me wondering about what we're seeing in some of our value-added ag businesses. Will Fall Festivals be impacted by relatively high gas prices and a sour economy? Are consumers continuing to visit farm markets? What does this mean for our value-added ag and food businesses? Leave a comment to let us know your thoughts.

Thursday, October 9, 2008

Country of Origin Labeling

Growing concerns over the safety of imported goods has driven the USDA to mandate country-of-origin labeling (COOL). COOL must be placed on raw beef, veal, lamb, pork, chicken, goat, wild and farm-raised fish and shellfish, fresh or frozen fruits and vegetables, peanuts, pecans, macadamia nuts, and whole ginseng. There are exceptions however, including processed foods, mixed foods, and butcher shop/fish market products.

Read the article in the link below. How does this new law affect your ag business? In your opinion, is this law helpful to the public? Are the rules clear to you?

Foods to Get COOL: Country-of-Origin Labeling