Lessons from the Great Recession

The recession did, however, lead to a few beneficial developments for the industry. Zerr points to the Federal Reserve’s actions at the time, which weakened the dollar. “A weaker dollar gives many of our export countries the ability to purchase an increased amount of our products compared to when the dollar is strong. This lifted the demand for our product during a time when most were experiencing economic hardship.”

Tax policies to promote economic recovery were also helpful. “Bonus depreciation specifically allowed us to capitalize on a perfect situation where during a prosperous time (due to the weather, a weakening dollar, and other factors), it made tax sense to invest significantly in our infrastructure,” Zerr explains. “This investment will pay dividends for many years to come.”

Some of the steps growers have taken internally will enhance their businesses going forward as well. “Because the world was experiencing economic hardship, we had to implement increased credit controls surrounding our sales activities,” Zerr reports. “The low long-term interest rates that existed in the past five years have also allowed us to ensure our balance sheet is in order and we are prepared for any adversity that may come in the future.”

Zerr stresses that avoiding high levels of debt will certainly help position produce firms for the next recession. “When living through times like the past five years, it is very apparent that many learned their lessons the hard way… Highly leveraged organizations have intrinsic risks that may be hidden from the outside, but in fact still exist,” she says. “The focus on solid financial ratios, strong working capital positions, and systematic allocation of resources will be present in our organization for many years to come.”

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