Facing Financial Pressure
With a downturn in the farm economy, many farmers are under increasing financial pressure.
Low commodity prices are shrinking cash flow for many farmers, forcing some to take out more or higher interest loans. But Jonathan Shepherd – a farm management specialist – says farmers make up only two percent of the population, so it can be easy to overlook their financial burdens.
"Really, it comes down to educating farmers on cost and what their true cost of production is, and trying to make smart, strategic decisions along the way, so that we don't get fixed costs way out of control, and just try to keep the cost of production as low as possible," says Shepherd.
Prices for most farm commodities are forecast to remain relatively low in 2019, so Shepherd says farmers should be thinking about whether scaling down the size of their operation or making other changes is in their best interest. And while there's stigma associated with the word 'bankruptcy,' he says for some farmers, it may be a smart financial move.
"Nobody likes to talk about bankruptcy or debt reorganization," says Shepherd. "But, that's a reality for some farmers, unfortunately. And depending on the specifics of an individual's situation, they may in fact be able to file Chapter 12 bankruptcy and actually continue farming and do some debt reorganization."
He says it's not easy for farmers, who are currently trying to manage financial loss and growing debt during a trade war.