Tough financial times have hit communities across the United States and beyond, but the problems are not just urban and suburban. Many farm families - particularly those in pork and dairy production - have been hit hard by economic forces, many of which were beyond their control.

"I have had several hog and dairy operations that have been severely impacted by the markets of the past 18 months - some to the extent they may not stay in business," said Kansas State University agricultural economist Duane Hund. "In fact, I have two who are selling out because they can't afford to continue on."

"Of course when bad economic times hit an industry, those who have taken on additional debt because of recent expansion or who recently entered the swine or dairy business, will typically be the first to exit," Hund said. As administrator of the K-State Research and Extension Farm Analyst Program, he works one-on-one with farm owners and managers to determine their financial position and improve it.

Hund said that farmers and ranchers who have equity built up and have older facilities that are paid for can weather economic storms longer than other more financially vulnerable operations.

"Nonetheless, even some of those (producers) are questioning their ability to stand additional losses if they continue," he said. "It's hard to start and stop a dairy or swine operation. It takes a lot of startup time and the fixed costs for things such as facilities and insurance continue on whether animals are present or not."

"From a farm financial management point of view, I would urge people not to retreat from or deny their financial challenges, but rather to objectively assess and understand them," said Dan O´Brien, K-State Research and Extension agricultural economist based in Colby, Kan. "I think this would help them to take the steps necessary to deal with and remedy critical issues facing their family farming operations. They need sound financial advice in a time like this - and they will need accurate financial numbers to be able to assess their farm situation."

"Keep your professional advisors in the loop, and communicate with them regularly," advised LaVell Winsor, also an economist with K-State´s Farm Analyst program. "A lot of the problems right now are industry problems, but producers should identify any `holes´ in their operation, and take steps to improve those problems."

Key stakeholders need to have a clear understanding of where the operation is financially, Winsor said. She recommends that producers analyze their expenses and reduce them where possible.

"If you're not familiar with risk management tools such as hedging, learn now and lock in profits when available," she added.

"Keep a close eye on money being taken out of the business for family living or other expenses and if you don´t already have one, now´s the time to create a family budget," Winsor said.

Hund suggested three key steps that farm operators should take, especially in difficult times.

"Farmers should know where they stand financially and keep close tabs on equity positions, as well as profit and loss statements at least on a quarterly basis if not monthly," he said. That takes a lot of accounting but it is vital to keep close reins on an adverse situation.

"Second, I encourage producers to carefully budget for personal living needs," he added. "For example, compare the situation to a household with two wage earners where one is laid off. When income is reduced or cut in half in this example, everyone in the family knows they must instantly rally together and learn what they can do to live on one person´s paycheck. It's easier to do in this example because they have steady income week to week. Now compare this to a farm family whose paychecks come once or twice a year at harvest time. The farm family is often challenged to budget accurately due to the fluctuation in income. They are used to borrowing from the bank to plant their crops and pay living expenses so they don't always have as tight a grasp on the personal living withdrawals.

"Finally, and this is tough - every family needs to come to a point where they say 'enough is enough. We can't adversely impact our equity position any further because if we do, we may reach the point of no return,'" Hund said. "It's one thing to work hard and break even. It's quite another to work hard and lose money in the process. That´s like paying for the privilege to work instead of the other way around."

Hund noted that many of the difficult financial situations are not particular to farming. Private businesses in town suffer the same issues in a challenging economy.

"Families in economic challenging times need to communicate with others as well as within their own businesses," Hund said. "Too often farm and ranch operators shoulder the burdens silently and get eaten up by the stress, so that when things turn around they may not be in a position to stay with it."

"The facts are, not every business survives economic downturns," he said. "But every family can survive with faith and a shared purpose to support one another while they seek solutions. Clear heads filled with `can do´ attitudes will most often rise from the ashes of adversity to fight another battle and win in the end. They just need to know that they can do it."

Help is available for farmers, ranchers in financial, emotional stress

Numerous factors have dealt a financial blow to farm families in recent years. Several Kansas State University programs are available to help agricultural producers weather difficult times.

A sharp increase in feed costs to both hog and dairy operations that occurred at about the same time both of those industries were expanding production weighed on the bottom line for many producers. In addition, the early labeling of H1N1 as "swine flu" by some government agencies threw consumers - at home and abroad - into a world of misperception and misinformation, which knocked hog and pork prices to levels that for many producers were not sustainable.

* K-State Research and Extension Farm Analyst Program- 785-636-5462 or dhund@ksu.edu. The K-State Farm Analyst Program provides one-on-one educational services to Kansas farm families. Using the Finpack computer software program, farm analysts provide business analysis while teaching financial concepts through their application on individual farms. Analysts work with all types of operations as every farm plays an important role in the economic fabric of rural communities.

* Kansas Rural Family Helpline - 1-866-FARM-KSU (1-866-327-6578); or email farmksu@humec.ksu.edu or www.humec.k-state.edu/fshs/pfws/krfhprogram.html. The Kansas Rural Family Helpline is a non-profit, direct service program dedicated to meeting the special needs of rural families in Kansas. The Helpline provides confidential, short-term emotional support, competent advice, and qualified referrals directly to rural families struggling with an unmet emotional, medical, financial or legal need.

* Kansas Agricultural Mediation Service (KAMS) -1-800-321-3276 or on the Web at www.ksre.ksu.edu/kams/. Based in K-State Research and Extension, KAMS works with farm and ranch families in a confidential manner to find information, to connect families with services and to help resolve disputes that arise with government agencies, banks, suppliers and others. Two components of the system are key features of KAMS´ services -- financial counseling through the Farm Analyst Program and legal counseling through Kansas Legal Services. In many cases, KAMS services are free of charge. When there is a fee involved, it´s often much lower than the industry standard, according to KAMS officials.

* Kansas Farm Management Association (KFMA) -785-532-1513 or on the Web at www.agmanager.info/KFMA/. KFMA, a part of K-State Research and Extension, has economists based in several communities throughout Kansas who work cooperatively with farm families to provide members with production and financial management information for use in decision making. The goal of KFMA is to provide each member with information that can be used to help make farm and family decisions. KFMA economists use on-farm visits, whole-farm analysis, enterprise analysis, and other programs to assist producers in developing sound farm accounting systems; improving decision making; comparing performance with similar farms; integrating tax planning, and marketing and asset investment strategies.