In a bid to help Louisiana producers make solid, informed financial choices on their farms after a hurricane-wracked cropping year, the LSU AgCenter has set up a telephone hotline. For financial consultations, farmers can call (225) 578-2266 from 8 a.m. to 4:30 p.m., Monday through Friday.
“This type of hotline isn’t really new to us,” says Kurt Guidry, an economist with the LSU AgCenter. “We’ve set up something similar after other disasters and financial difficulties in the state’s ag sector. We did it after the 2005 hurricanes and also after a terrible drought situation a few years before that. The LSU AgCenter now has a history doing this, and, for the most part, we’ve got it down.”
The hotline serves two groups of producers.
“Some producers just want additional information we can provide. That might be on financial management, on USDA/FSA disaster programs, on marketing, and other things. We’re happy to help them.”
The majority of producers that call, however, are looking for individual financial consultations.
The hotline is manned within the LSU AgCenter’s Department of Agricultural Economics and Agribusiness. A producer can call and request an individual meeting with an economist.
“The first meeting, as I see it, is a basic information-gathering session — preferably a two- or three-year history of cost of production, historic yields, farm program payments, base acres, information on current debt structure, types of loans, number of loans, payment dates, payments rates, and other things.
“Then we ask the producer, in a perfect world, what he’d like to do in terms of an enterprise mix. We try to base a plan on what he’d like to do for 2009.”
The economists bring alternatives to the table including “different crop mixes, reducing acreage in one commodity and increasing it elsewhere, adding a new commodity to the mix, different financial management strategies, restructuring debt, and other things. We want to help him see what these various scenarios might do to alleviate some of his burden. What’s the smartest route to take?”
After pulling the options together, the economist provides the producer the results. The producer is given “more information he can take to his ag lender and ag supplier to say, ‘This is what the numbers look like if we take the X, Y or Z route.’”
Using overall state historical data, the LSU economists could do a general plan for producers without asking for specifics, says Guidry. The problem with that, of course, are the outliers.
“A general plan may be relevant for the state but not for a single operation. That’s why we ask them to provide personal information.
“Producers should also know that everything they tell the economist is kept completely confidential. Often producers are leery of providing financial records, and that’s understandable. But the personal information never leaves the economist the producer is working with. It does not leave that circle.”
Another thing, says Guidry: the hotline is only a service.
“Many times, producers call in to see if we have money to provide them. Unfortunately, we can’t help them that way. That’s where USDA and FSA come in. We’re just providing a way for producers to find avenues to deal with the impacts of hurricanes and getting back in the black.”
What are the top questions Guidry is fielding from producers?
“After the hurricanes, the biggest issue was the inability to meet contracts and decreased revenue. They also wanted to know about the type of assistance available to producers.”
Now, as the focus shifts to 2009, the biggest question is which crops to plant.
“What looks good? Producers are beginning to run through numbers and are left scratching their heads. We’ve gotten a lot of calls from worried producers. These next few months will be very important in determining the cropping mix in 2009.”