Elizabeth Yeager

(Greg) This is the Kansas Soybean Update. It’s brought to you by the Kansas Soybean Commission. The Soybean Checkoff, Progress Powered by Kansas Farmers. Elizabeth Yeager, Assistant Professor of Ag Economics at Kansas State joins us. Elizabeth, the wet spring and possibly summer, coupled with new Farm Bill programs have created a lot of stress for soybean producers. So, in times of stress management, like many may be feeling now, what kinds of advice would help them manage it? (Elizabeth) So, as we’re thinking about the times that we’re facing right now, with like you said the wet spring, looking into a possibly wet summer, obviously thinking about how you’re going to manage your income is incredibly important. So, managing your income, managing your cash flow is incredibly important. Right now, it’s probably going to be difficult to think about any renegotiation in terms of cash rental agreements, but that’s certainly something to start thinking about when you do have conversations with your landlords again. But certainly this year’s probably going to be a year when you’re going to want to postpone any machinery and equipment purchases. So, unless you just have to purchase new machinery this year, this is probably a year to hold off on big capital investments. Also managing your assets, so trying to maybe hold lower inventories this year. Try and reduce some of your debt, as well as managing liabilities. This might be a good year to try and extend some of your loan terms or think about refinancing or reducing debt. (Greg) The liabilities are something that every farmer really stresses out about. But in the case of the great unknown, about not knowing what this weather is going to do and how these new farm programs are going to pay out, that kind of just doubles or maybe even triples the importance. (Elizabeth) That’s right. So always managing liabilities is important, but right now it’s really a good time to talk to your lender early. This is certainly not a time to wait until the last minute, or until you’re extremely stressed out about this. Go ahead and talk to your lender early to figure out, you know is there a way to maybe pay interest only. Obviously that is going to extend your payment schedule, but having that conversation right away or as soon as possible, rather than waiting until the last minute is going to make it a lot easier to deal with. (Greg) I think of an old phrase – early recognition, early resolution, that resonates here? (Elizabeth) Exactly. Now’s really the time. As soon as you recognize the issues, go ahead and start having a conversation. Your lender is really going to respect that and be more willing to work with you knowing that you recognize some potential issues right away, rather than waiting until the last minute. (Greg) Alright Elizabeth, we appreciate the time, thank you very much. (Elizabeth) Thank you. (Greg) Elizabeth Yeager, Assistant Professor of Ag Economics at Kansas State, joins us on the Kansas Soybean Update. It’s brought to you by the Kansas Soybean Commission. The Soybean Checkoff, Progress Powered by Kansas Farmers. Learn more at kansassoybeans.org. For Kansas Soybeans I’m Greg Akagi.

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