Recognizing and managing during business cycles

From an agricultural perspective we experience four seasons in our annual trip around the sun. Particularly for perennial plants, this results in a flush of vegetative growth in spring followed by a reproductive phase in summer/early fall, a period of storage and hardening off in late fall, and a period of dormancy in winter. The arrival of spring signals the beginning of a new iteration of the cycle.

All businesses, both individual operations and broader business sectors, go through similar phases of growth, prosperity, contraction, and consolidation. The main difference is that the timing of these phases is much less predictable and often hard to recognize while they are happening. However, keeping this cycle in mind and watching for indicators of where the industry cycle has been can help you capitalize on opportunities or anticipate and strategize for upcoming tight periods. The term “predict” was purposely not used as it is hard to pinpoint the timing for something that gradually changes over time, but given that it is a cycle you can anticipate in a general way what is likely to happen next.

These cycles are more pronounced or well known in some sectors; however, in newer sectors and emerging opportunities the cycles may not have had time to develop, making them harder to see and anticipate.

Here are some links to examples of agricultural sectors with identified cycles:

Cattle Cycle Hog Cycle Dairy Cycle Grain Cycle Wine Cycle

Canada

US

Canada

US

-

US

Canada

US

-

-

----Global