Classroom
BY SUZANNE KEENE
CONESTOGA Fourth graders
from Lancaster City Schools left
their classrooms, textbooks and
chalkboards behind this week and
escaped to the farm’s barns, hay
bales, and animals. State Rep.
John Barley hosted 140 of the
students at his dairy farm in
Conestoga, where the children
enjoyed a tour and a short
presentation about dairying. Other
Lancaster city students toured the
Jay Landis farm in Lancaster.
The students had plenty of
questions for the farmers who
donated their time to give the tour
"How does and cow have a baby 9
When cows have a calf, do they live
with the mother 9 How do cows
sleep 9 ”
Patiently, the farmers answered
all the questions and explained the
daily operation of a dairy farm.
They encouraged the children to
% V
A
Tanya Roark and Marisol Rivera would like to feed the cow, but are just a bit in
timidated by her long neck.
Local credit situation no ‘crisis,’ bankers say
(Continued from Page Al) outright sale to a tract or sub
decade, when compared to land in division developer simply do not
other states. In Ohio, for instance, exist in the Midwest to the extent
land prices climbed 37.5 percent that they do here, bankers say.
from 1977 to 1981, then dropped 28 And though farmers may
percent from 1981 to 1984, losing grumble that those forces have
almost all the ground that had been pushed land prices upward (which,
gained in the earlier run. of course, they have), those same
Midwestern farmers who bought pressures have kept the land
at the height of the land rush are * values from dropping suddenly, as
now holding land worth 20 to 30 they did in the Midwest. And thus,
percent less than they paid for it. they create a safety net, of sorts,
And many don’t have enough for the equity stake local farmers
capital invested to prevent have in their property,
themselves from technical in- And even if they don’t sell the
solvency, or owing more than their farm to a housing or shopping
holdings are worth. center developer, eastern farmers
still have the opportunity to work
off the farm in industrial or service
jobs that can produce income to
supplement their farming efforts.
That outside income can well
make the difference between
success and failure, especially in
hard times, local bankers told
Lancaster Farming.
The farm income and credit
squeeze of the past few years, both
bankers and farmers insist, has
made both lender and borrower
much more careful about taking on
additional credit.
“Farmers are much better
educated now in farm financial
management,” explains Jerry
Ogline of Lancaster Farm Credit.
And, adds Damn Boyd, vice
president and director of the Agn-
Finance Department of Hamilton
Bank, bankers are working much
In Pennsylvania, however,
prices increased at the more
moderate clip of 30.6 percent in the
end of the 70s, then dropped only
about four percent in the first part
of this decade, according to the
USDA survey. And in the Nor
theast, as a whole, land prices
increased 30 percent from 1977-81,
and then increased again
although at a more moderate 13
percent rate from 1981-4.
Part of the reason farmland here
has not been subject to such
tremendous variation is the
pressure of non-farm uses, which,
in many cases, has raised the
value of farm property beyond the
range justified by fanning ac
tivities alone.
Alternatives like sale of hard
road frontage for housing lots, or
moves to the farm for Lancaster City students
help the dairy farmer by eating
dairy products and keeping litter
in its proper place not in far
mers’ fields.
The farm tour was part of a
larger program aimed at
educating the students about
agriculture. Earlier in the week,
local farmers traveled to the city
elementary schools to tell the
fourth-graders about their farms
and the products they produce.
Project coordinator Jane
Eshleman said the program was
based on a pilot project in the Penn
Manor School District last Oc
tober. Eshleman, a former Penn
Manor school board member, is
Lancaster's coordinator of the "Ag
in the Classroom" project, which
was developed through the com
bined efforts of the Department of
Education, the Department of
Agriculture and the Pennsylvania
Farmers Association
Jose Rosario and Ronaldo Rivera are fascinated with this tiny calf
*. *
sf\ •**
more closely with their tarmer
clients to make sure they aren’t
getting in over their heads.
“I’d like to think the worst is
over,” Boyd said, adding that the
CoreStates-affihated bank saw its
problem loans peak in 1983 and
1984.
Pennsylvania Farmers
Association financial analyst Dick
Denison noted that the banking
industry has taken a positive step
in using a farm’s cash flow
rather than its equity value in
determining whether to grant a
loan.
’’They’re lending on the ability of
the farm to produce income,” he
said, not assuming that constantly
increasing land values will cover
up any mistakes that are made in
evaluating the farm’s income
producing capacity.
As one analyst noted, when a
bank begins to base its lending
decisions on equity value rather
than cash flow, it starts in motion
the process that results in the bank
eventually taking over the farm.
The USDA report, for instance,
estimates that, in general, farms
with debt-to-asset ratios of over 40
percent may well experience
serious financial difficulty because
of the heavy burden of servicing
the debt at today’s interest rates.
And farms with debt ratios
above 70 percent, it said, face
(Turn to Page A 37)
At the end of an informative presentation about dairying,
the students got to sample chocolate milk.
Dairy farmer Ray Reitz tells the students about the dif
ferent products that come from dairy cows.