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Minnesota Extension offering free financial counseling

Financially-strapped farmers continue to be encouraged to refinance while interest rates remain historically low.

University of Minnesota Extension economist Kevin Klair says while rates have climbed almost one percent since the beginning of the year, it’s still a good time to extend some short-term debt longer-term.

“And (interest rates) are expected to continue going up.  And that’s been one of the really big concerns for ag economists the last several years (if) interest rates start going up and commodity prices lower.  That could cause more financial pressure.  So they’re still low now and take advantage of them if you can, because they’re probably heading up.”

If possible, Klair recommends using owned land as collateral when refinancing.

He tells Brownfield the common denominator for most farmers struggling to remain profitable centers on how working capital was managed during the good years leading up to the economic downturn.

“That could’ve been buying land (or) machinery; particularly younger farmers just getting started.  Another aspect is if a lot of your land is rented and you’re paying high rental rates and didn’t have an owned land base.  There’s a lot of factors like that.”

Klair says the current ag economy has forced many producers to cut costs, and in some cases sell off assets to stay in business.

Minnesota Extension will be offering free one-on-one counseling to farmers in serious financial stress.

To set up a confidential appointment, call 800 232-9077.