University of Minnesota Extension will begin offering one-to-one financial counseling across the state to farmers in serious financial stress.

The initiative comes as farmers prepare for a new growing season, beginning their fourth year of declining crop prices that began in mid-2013. Thin profit margins — or in some cases losses — have caused many producers to tighten their belts by restructuring debt, renegotiating deals for renting land, and trimming costs for seed, fertilizer and other expenses.

Even so, said Extension agricultural economist Kevin Klair, many farmers are still facing cash flow problems and projections that prices in 2017 could remain lackluster.

"We're hoping that producers and lenders would have something that they could turn to, and look at financial options, before they have to get into mediation," he said.

The program announced Wednesday will provide free confidential appointments with trained agricultural business professionals to growers who request assistance.

The magnitude of financial stress is not nearly as widespread as conditions during the farm crisis in the 1980s, Klair said, when many thousands of farmers with huge debts had to sell out and close their operations.

But the farm economy has grown progressively weaker in recent years. The latest national outlook for agriculture, presented last month by U.S. Department of Agriculture Chief Economist Robert Johansson, said that farm income has fallen almost 50 percent since its peak in 2013, the largest four-year drop in 40 years. In 2017 farm income is expected to remain flat, he said, although farmland values remain relatively strong.

Surveys from regional Federal Reserve Banks have shown similar trends of declining farm income, reduced cash flow and weakening agricultural credit conditions.

Klair said growers, lenders and farm groups in Minnesota asked whether Extension could provide additional services and more farm financial education.

The new program has hired five analysts who include retired agricultural business professionals from Extension or other organizations. Klair said the number will likely grow to 10 or 12 analysts that will be working into next fall and winter. He expects the program to run for two years and said it will be modeled after similar services in Kansas and Iowa.

"It will start with an initial meeting and trying to spend maybe half a day or more with a farm family," he said, "reviewing their finances and talking through options." That may be enough for some, Klair said, although others may need extra meetings or follow-up phone calls.

Harold Wolle, president of the Minnesota Corn Growers Association, said the program should be worthwhile for beginning farmers, part-time farmers, or others who might have accumulated large debt.

"Those folks are out there, but there's not a great number of them," he said.

Wolle said that most farmers are not experiencing a severe amount of financial stress, in large part because of high prices and profits in the past, especially between 2011 and 2014.

"A lot of farmers have built a lot of liquidity into their balance sheet, so they're not in a [financial] problem state yet," he said.

The Extension program is funded by a $248,000 grant from the University's rapid agricultural response fund, which has provided money in the past for short-term needs such as response to the bird flu and other animal diseases.

It augments other services currently available in Minnesota, including the Farmer-Lender Mediation program also run by Extension and the state Department of Agriculture's Minnesota Farm Advocate program.

Klair said the one-on-one counseling program is for all farmers, including livestock operators.

"Beef, hogs and dairy have also had depressed prices this past year," he said. "We often think about crop prices because they came down so far, but the struggling farm economy is affecting everyone."

Farmers interested in signing up for the program or receiving more details can call the Extension farm information line at 1-800-232-9077.

Tom Meersman • 612-673-7388