Commodity grain producers and landowners have endured five years of paradigm shift adjusting to lower commodity prices and subsequent revenue in 2019 and foreseeable future.  Assets and debt acquired during the dramatic climb in revenues between 2008 and 2014 have become an obstacle for many farm businesses to overcome.  With no substantial increase in revenue predicted for the next ten years according to the USDA, some businesses face the risk of depleting equity in order to cash flow.  Adding to income erosion is decline in commodity demand due to African swine fever decimating the Chinese hog population and subsequent lower feed demand.  At the same time tariffs levied on grain imported to China from the U.S. has forced Chinese buyers to adjust the amount they are paying for U.S. grain lower to manage the tax expense.  Lower demand, coupled with tariff induced lower prices is the perfect storm which may push some farm businesses past the point of economic recovery.  To quote Dr. David Kohl, “The farther you walk toward the end of the pier, the deeper the water gets.”  

In addition, family living expense increased dramatically during the period of high commodity prices.  Kentucky Farm Business Analysis indicated several top tier management businesses did not achieve net profit to meet family living expense levels in 2018, and the prediction for 2019 indicates the same outcome.  

To provide resources and information necessary to help producers get through the period of lower revenues, a series of row crop risk management seminars were arranged. One seminar was conducted in Daviess County.  At the meeting, producers received the commodity outlook and expected 2019 price potential.  They prepared and reviewed 2019 anticipated price enterprise budgets, and studied potential cash rent and machinery cost savings.  Crop insurance risk management and price risk management using futures and options were also discussed.  Attendees were advised on developing a 2019 risk management plan.  A pre and post survey were completed by participants.  Results indicated a knowledge gain of understanding the stocks/use ratio, knowledge of what working capital actually is, and a knowledge gained concerning crop insurance utilization