A2B-Lancaster Farming, Saturday, December 12, 1998 GAIL STROCK Mifflin Co. Correspondent MILROY (Mifflin Co.) Mif flin Countians certainly had a lot to be proud of at their annual Farm City banquet held recently at the Milroy Fire Hall. Nearly 180 peo ple gave Miss Pennsylvania May ra Acosta and Pennsylvania Secre tary of Agriculture Sam Hayes Jr. standing ovations. Raised in Lewistown, Acosta said she was proud to call Mifflin County her home. Acosta spoke of her role as Miss Pennsylvania and the importance of pageant scholar ship money. Over $3O million is given to pageant winners and par ticipants across the nation each year. Just as important is the partici pant’s desire to make a difference. Acosta’s critical issue is CPR and injury prevention. “I’m not a doc tor, but I know I could save some one’s life if I had to.” Acosta plans to study ethno musicology, which is the study of folk and ethnic music, specifically Latin American music. Her family is from the Dominican Republic. Huntingdon County native Sam Hayes spoke of the importance of a strong agriculture in maintaining a strong nation. He spoke in spite of laryngitis. “Show me a national that can't feed, cloth, or shelter itself, and I will show you a nation a risk . .. Beyond food, clothing, and shel ter, agriculture in Pennsylvania and America provides the social cement, the economic service, and the political stability every nation needs.” Hayes is a Vietnam veteran who was awarded the Bronze Star and was a lawmaker from 1970 until 1992. “We couldn’t be nearly as good as we are if we didn’t Current Low Prices No Cause For Farm Crisis COLUMBUS, Ohio Despite current low gain and livestock prices, the U.S. farm sector is in strong financial shape and far from the troubles experienced dur ing the farm crisis of the early to mid-1980s, said Ohio State Uni versity Extension agricultural eco nomist Allan Lines. However, things could get worse in the next two to three years if prices don’t improve, Lines said. “Yes, there arc regional pockets of distress in areas such as North Dakota and Texas, and producers of some commodities are experi encing financial difficulty,” he said. “But farm finanacial date available from the U.S. Depart ment of Agriculture presents an overwhelming picture of financial strength for the nation and Ohio." The net worth of U.S. farm businesses is estimated to be a re cord $957 billkm, up almost $l9O billion during the past five years. Ohio’s farm business net worth is estimated at a record $33 billion, up nearly $9 billion during the same period. Total assets on U.S. farms are expected to be valued at $1.13 trillion on Jan. 1, 1999, up by more than $2OO billion during the past five years. Ohio’s assets are an estimated record $37 bil lion, an increase of nearly $lO bil lion. At the same time, farmers are being more cautious about bor rowing money to buy land and equipment, which is what got them into trouble in the ’Bos, Mifflin County Holds Farm/City Banquet have the good agriculture that we have here in Pennsylvania.” The David Stuck family step ped forward to accept the Farm Family Business Award. The Stocks' farm at Plum Bottom near Reedsville. Stuck began farming in 1989 with 45 cows. After re modeling the milking parlor at Plum Bottom, Stuck increased his herd to 200 cows. David and his wife, Jennifer, keep the day-to day operations running smoothly while David’s parents, Barry and Jean Stuck, help by keeping the farm records. The Stucks employ one part-time and four full-time workers and milk three times a day. The City Family Business Award went to the Melvin Wilson family of Wilson’s Meats and Grocery in Lewistown. Melvin has owned the market since 1965. His son, Steve, is a major part of the operation. Steve accepted the award on behclf of his family, in cluding his mother, Thelma, who passed away recently. The Mifflin County Conserva tion District Goodyear Award went to the Meily family from Huntingdon. The district also gave $5O each to the Boy Scouts, Girl Scouts, and FFA for conservation projects. The Mifflin County Garden Chib gave Acosta a rose. A rose bush will be planted in the gardens at the McCoy House in Lewis town in her honor. Hayes was given a limited edition Christmas ornament designed as a fund-rais er for the National Gardens in Washington. Although ground has not yet been broken for the gar dens, the Botanical Gardens will be building the gardens sole through private donations. lines said. “Even with continued low prices, it doesn’t appear we’ll have a situation to recreate the crisis of the ’Bos because fanners arc not borrowing as aggressively now as they did then,” he said. “In the ’Bos, farmers’ debts were too high and when commodity prices dropped they didn’t have the abili ty to pay off those debts.” For example, farm debt repay ment capacity for the U.S. farm sector is 61 percent, meaning farmers are only using 61 percent of the debt they could support from cash flow. In the early ’Bos, this figure was nearly 110 percent, which means farmers owed more money than they could support, lines said. The U.S. farm debt-to-asset ra tio is now at a very safe IS per cent, which means for every $lOO a farm is worth it owes $l5 in debt. Lines said. Ohio farms are in even belter shape at 11 percent In 1985, the U.S. debt-to-asset ratio reached nearly 24 percent and was above 20 percent from 1982 to 1986. Another good indicator of fi nancial stress on farms is the debt service ratio, which measures the number of times farm business could pay its principle and interest payment with its current cash flow. A safe ratio is about 2. This number hasn’t fallen below 2 dur ing the past five years and is esti mated at 2.7 for the U.S. in 1998. In comparison, the U.S. debt ser vice ratio was below 1.4 from WiK; Bus '" esB Award went to the Melvin Wilson family of b« Z. ■”‘ rd " ere ( "° r) w,taon ’ Cind » The David Stuck family accepted the Farm Family Business Award. Left to right are Mifflin County Dairy Princess Laura Peachey, Sam Hayes holding Julia Stuck, Jenni fer Stuck holding Laura Stuck, and David Stuck. 1981 to 1984. While the financial health is strong on U.S. and Ohio farms right now, average com, soybean, and hog prices need to improve over the next two to three years. If they don’t, the economic climate on U.S. and Ohio farms could de teriorate rapidly as land values would likely begin to fall, Lines said. Average U.S. com prices this October were $1.91 per bushel, 63 cents below October 1997 and 39 cents below the average from 1990 to 1992. Soybeans were $5.18 per bushel, down $1.32 from last October and 43 cents be- low the 1990-92 avenge. Avenge hog prices with lows in the teens have fallen to just more than 28 cents per pound, nearly 19 cents down from October 1997 and mote than 19 cents below the 1900-92 average. “It doesn’t appear we arc headed for a reoccurrence of the ’Bos debacle, but that doesn’t mean it can’t happen," Lines said. “There ate things that could trig ger similar hard times for fanners, and a continuation of $2 com and $525 soybeans for a three-year period is one example." If crop production is normal over the next three years, prices may rise slightly to $2.20 per bushel com and $5.60 per bushel soybeans by 2001, and hog prices could recover to 47 cents per pound. But that may not be • enough to save some farms from the reduced profits that would make existing debts too difficult to pay, Lines said. Asset values primarily land also would de cline, weakening balance sheets, - reducing the ability to borrow and compounding financial distress. To prepare for the potential downturn in the farm economy, producers should develop and im plement strategies to reduce debt and control costs, he said.
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