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3. 2026 Extension Risk Management Education National Conference

Approaching a Farmer in Financial Trouble: Evaluating Alternatives with Confidence

Mariah Beverly, Pauline Van Nurden, and Kevin Klair

Summary

Farmers in financial stress are often bombarded with conflicting options: Should they restructure debt? Diversify into a new crop? Sell assets? Or simply try to improve efficiency? In today's economic climate, making the wrong choice based on "gut feeling" can be fatal to the operation. Educators need a robust tool to help farmers make an informed choice.

This session introduces FINLRB (Financial Long Range Budgeting), a component of FINPACK software and the most widely used tool during the 1980s farm financial crisis. Once educators have diagnosed the source of financial stress, the next step should be to focus on the cure. We will demonstrate how to use FINLRB to model a farm’s typical year and run side-by-side comparisons against various “What-if” scenarios.

Participants will learn how to help farmers “pencil out” decisions before they risk time and money on a decision that is not profitable or feasible. Specifically, participants will learn how to:
• Analyze the current operation with potential alternatives
• Compare alternatives like debt restructuring, partial liquidation, or adding an enterprise, and see their impact on the operation
• Assess repayment capacity to see if proposed changes will generate enough cash flow to pay debt
• Use the output to guide farmers through logical evaluation of their options that best meets their business and family goals

Details

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