AMES, Iowa – Farmers face financial uncertainty almost each year, with unexpected changes in the markets and unpredictable weather events.
Last year, farmers across the Midwest dealt with record rainfall and flooding. This year, they’re dealing with low commodity prices that have crept even lower amid the market disruption caused by the COVID-19 pandemic.
One trusted resource available to help producers gain a clearer understanding of their farm financial situation is the Farm Financial Planning Program at Iowa State University Extension and Outreach.
Six financial planning associates are available to offer one-on-one financial counseling to those who request assistance. The associates conduct a computerized analysis of the farm using FINPACK software, and make recommendations about specific ISU Extension and Outreach specialists who may be able to help the operation improve.
Ann Johanns, program specialist in economics at ISU Extension and Outreach, said farmers are dealing with low prices and disruptions caused by the pandemic. She said working with a financial associate may help the producer look at the situation differently, and possibly find some solutions that were not previously apparent.
“There is so much beyond producers’ control so with the help of the associates, the producer might be able to look at some options they’ve never considered before,” she said.
The answer isn’t always what a producer wants to hear, but Johanns said the associates give an honest assessment about the path forward.
The associate offers a big picture look at the farm, and it’s up to the farmer to make specific changes and to contact the specialists who can help. While working with financial associates is important, Johanns said it’s equally important to follow up with the specialists the associate recommends.
“It’s all inter-related,” Johanns said. “The associates are one piece of looking at the overall picture.”
Building a relationship
John Jensen, of Knoxville, Iowa, has served as a financial associate for about four years. He said he likes when clients invite him back after the initial visit, so he can produce a summary statement of what they’re doing, and what they should consider.
The summary is useful for the individual, and can also be useful when working with a lender, Jensen said. Information is kept confidential, and he makes recommendations when appropriate.
But the decisions are still up to the farmer, including reaching out to the specialists Jensen recommends.
“If I see an obvious issue, I recommend they contact Iowa State and find a specialist for the problem,” he said. “But I don’t get into managing their operation – they have to do that for themselves.”
Jensen retired from ag and commercial lending in 2013, and like the other associates, he enjoys the opportunity to share his experience and offer up some meaningful advice.
Farmers can locate a Farm Financial Planning Program associate in their area by contacting their ISU Extension and Outreach county office or by visiting the Farm Financial Planning Program website. For questions on whether meeting with an associate is the right step, contact the farm management field specialist in your area.
Original photo: Applying nutrients to corn.