Stress....we have all experienced it. Perhaps the worst kind of stress involves finances. Drought conditions, low commodity prices, low crop yields, uncertainty in tobacco policy, and premature sales or liquidation in cow herds is causing extreme financial stress for Kentucky farm families this year.

"Many families will struggle to meet family living expenses," Steve Isaacs, farm management specialist for the University of Kentucky's College of Agriculture, said. "Repayment of operating loans and term debt repayment are in jeopardy."

Isaacs said the only thing that can really turn the situation around would be an upward swing in commodity prices and bumper crop yields in 2000.

By definition, a farm crisis is a general depression of prices and yields that have a widespread impact on farm profitability. Some farms have experienced financial distress even in good times, while others prosper even in bad times.

The current challenge for farm families is to figure out how to survive this crisis.

"Some survival options are cost cutting, stress management, asset liquidation, refinancing, farm and off-farm alternatives, government programs, and leaving farming," Isaacs said.

Many operations have already cut costs to the bone and are now looking closely at every expense, asking questions such as, will it return more than it costs; is it necessary; can I put it off. Isaacs warns against cutting expenses that will cost more in benefits than savings.

"Refinancing debt is another option (to deal with financial crisis)," Isaacs added. "Interest rates are creeping back up but are still at relatively low levels. So, if refinancing hasn't been considered, now may be the time to refinance operating or term debt."

Refinancing should reduce current cash flow obligations to meet debt payments and leave more cash to meet other business or family obligations. However, refinancing will result in more interest expense in the long-run.

Financial, personal and family stress associated with financial crises can be severe. Stress management is important since family communications often suffer during crisis. Even children are affected, therefore family support is crucial. Most areas have stress counselors available for families. Isaacs said public, private and church-supported resources are available.

"Talk to your family," Isaacs urged. "Talk to your Extension agents. Explore every option."

Don't forget your local county Extension office. Often, they maintain lists of counselors and other financial crisis contacts. The important thing is to handle the financial crisis immediately. Don't delay responding to stress. There are steps available to avoid financial disaster. Family members, partners, creditors, and lenders are more likely to help than condemn. This is a collective crisis, not an individual crisis; don't feel you have to go through it alone.