FARGO, N.D.-Not all farmers are in the same boat for financial stress, experts say.

About 25 percent of farmers are doing very well, 50 percent are OK, and 25 percent are struggling, said a keynote speaker at the North Dakota Bankers Association Ag Credit Conference, which ran Sept. 27-28 in Fargo.

John Blanchfield, of Damascus, Md., the Agricultural Banking Advisory Service, a consulting firm, after spending 25 years at the American Bankers Association in Washington, D.C.

Blanchfield ran the ABA's Center for Agricultural and Rural Banking, an ag policy-making department. Today, his company helps community banks improve their ag lending efforts-both the credit and "human component."

"I'm very concerned about how long this low price period lasts," Blanchfield says. "No. 2, I'm concerned about interest rates, and No. 3, how banks relate with their farm customers. Some of them are having problems."

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The idea is to not repeat mistakes from the 1980s. Improving communications, increasing human contact with farmers, and helping farmers manage are the keys, he says.

Don't repeat '80s

Blanchfield describes a "push-pull farm economy" dilemma for lenders.

Financially stable farmers - perhaps those without debt - will want to push ahead and grow their businesses, leveraging themselves, perhaps too much."Half of the farmers in America have no debt," Blanchfield said.

On the other side, struggling farmers will "pull" bankers into unproductive work trying to help restructure, where the bank's earnings aren't going to be helped. "Bankers are caught in the middle," he said.

The bottom 25 percent have a disproportionate share of farm debt. Some could exit and "take advantage of the equity they have," Blanchfield said.

"As difficult as this farm economy is, farm real estate prices have stayed very stable," Blanchfield said. One reason for that is relatively low real estate loan interest rates. Another is that banks so far have refinanced troubled borrowers and haven't pressured them to sell land or other assets "because they still have equity.'

Working capital

Farmers today are short on working capital-cash on hand-to tide them over. "I think working capital is lowest on strictly livestock farms," Blanchfield said.

James Reiner, an ag lender for Starion Bank, in Mandan, N.D., one of the conference attendees, agreed, saying working capital has declined over the past five years due to depressed commodity prices, drought, and now the tariff impacts.

Farmers should have working capital equal to 25 percent of a year's gross revenue, Reiner said. "If your farm is more specific and more exposed to higher levels of risk, you might boost it to 35 percent," Reiner said. Farmers have a "red flag warning" if they have "negative" working capital. Some with equity may be able to refinance, or spread current debt over 15 to 20 years. He thought 5 to 10 percent of farmers might be reaching "critical levels" and may need to sell land or other assets.

Blanchfield noted that the U.S. Department of Agriculture's Market Facilitation Program, designed to offset the tariff and trade war impacts on farmers, will pump $4 billion into farmers pockets before January.

Farmers have become accustomed to low interest rates, but that could change in a hurry, he said. Wall Street prime interest rates have been in the 5 percent range. Operating loan rates are "highly localized" but often tack on another 3 percentage points, to a total of about 8 percent annually.

"We're coming back to a period, I think, where interest rates will become a significant expense to all farmers who have debt," Blanchfield said. So far, values for productive land have remained strong.

Tackling stress

John Shutske, a professor from the University of Wisconsin in Madison, told bankers how long-term stress affects people's health and financial decision-making, safety, well-being and relationships.

Chronic stress can lead to heart attack, strokes, diabetes. Lenders can help reduce stress by long-term planning to re-establish a sense of control.

During busy times, farmers should concentrate on eating correctly. "Your body's like a machine," and it shouldn't be fed low-quality fuel. Farmers should make sure they keep in touch with a doctor or medical care provider.