He also noted that ag lenders also have to counsel farmers and ranchers on living cost management.  Family living costs have risen dramatically over the last four decades, he said. In 1967, family living withdrawals were $4,000 per year. In 1986, costs had increased to $20,000 and by 2011 they were at $80,000, according to data from the Nebraskaland Farm and Ranch Management Education Program.

“Family living withdrawals are like concrete,” Kohl said. “Once set, they are difficult to change. Personal finance management is critical,” he said.

Some of those changes include:

  • Personal interest and consumer credit card costs increased by 365 percent from 2000 to 2010.
  • Social Security and income tax increased 192 percent. “Farmers and ranchers are paying more taxes because times have been good,” Kohl said.
  • Medical and health insurance costs jumped by 180 percent during that same period.

Kohl said 40 percent of farmers and ranchers have no health insurance. “Lenders have to look at that.”

He said liquidity is important to a farm or ranch. “Liquidity means money is available when you need it. It’s available for the next investment.”

Kohl said agriculture always faces issues of hardship — weather, politics, production pests — but opportunities are also available. “Agriculture is the foundation of success in America.”