Dave Hess has been a certified farm advocate for more than 30 years, helping farmers navigate after they miss loan payments and creditors are at their doors.
"It's been busy since October, but this really started last July with an increase in the number of people who've called. It's a lot more now. I don't know how many files I have in my briefcase. Next week I maybe have one day I'm not going somewhere," said Hess, who farms near Comfrey.
While the cases have risen, so have the levels of stress and mental health pressure on farmers in financial straits.
"It gets emotional. I have one where he's threatened suicide and we're trying to come up with a solution. It's a completely different lifestyle they may face. They've committed to farming all these years and then it completely changes."
The Farm Advocate Program was started by the Minnesota Department of Agriculture in the last farm crisis.
Hess helps farmers when they go through mediation with their lenders. If a payment doesn't get made on an agriculture loan, before a lender can foreclose, the lender has to file mediation. Farmers have 14 days to agree or mediation is waived, Hess said. If mediation is accepted, lenders can't take any action for 90 days.
There is an orientation session for the farmer and Hess prepares them to go before a mediator and their lenders.
"They need a balance sheet and cash flow done. I attend the meeting and, if need be, we meet with a potential new lender or go see an attorney." The farmer also has to notify all his other lenders, who can attend the mediation.
"More often now the cash flow is just about nonexistent. If there is some equity some of the banks are willing to go to a remortgage and continue. But in a lot of cases you have to find a new lender, which is really hard. No one is too willing right now to take on anyone new," Hess said.
He said lenders often try to work something out and sometimes they allow the mediation to be extended so farmers can sell grain to get more cash.
The first mediation session, he said, often goes the same. "Everyone's very defensive. After two or three sessions, things mellow out and everyone sees the big picture of where things are at," Hess said.
"There's cases where the farmer just never communicated with their lenders at all. If everyone communicates, there's a better chance there will be a solution. It might not be the solution the farmer likes — maybe selling off machinery or some livestock or some land."
But if they do sell land or equipment, other problems pop up, including tax ramifications.
"There was one case where they sold cattle and machinery. They were qualifying for MnSure, but after they sold stuff, they weren't qualified for it and they have to pay back $8,000."
In Minnesota there were more than 3,500 mediations filed in 2018 although just 1,220 farmers accepted and completed the meditation process.
Of those, 84% reached an agreement.
Farmers who didn't accept the mediation either worked out an agreement on their own on restructuring, abandoned the collateral or filed bankruptcy.
Hess said if mediation doesn't work, farmers probably file for bankruptcy protection.
When things move beyond mediation to bankruptcy, attorneys such as Mark Halverson, of Mankato, step in.
Unlike other businesses or individuals, farmers generally file Chapter 12 bankruptcy. It's intended to help debtors develop a repayment plan to pay off all or a portion of debts within three to five years. It is designed to be more streamlined and remove some of the barriers in the other types of bankruptcy processes.
"It's one of the main things I do," Halverson said. "Chapter 12 is a special bankruptcy chapter for farmers that was implemented about 1986. I was one of the original Chapter 12 trustees for Minnesota, seeing that cases were conducted properly and in the end there's a plan that will work."
He was a trustee for 20 years and now files Chapter 12s for farmer clients.
He said the numbers of bankruptcy filings are up, but the number of cases are not particularly high. "For every case filed, there's probably 20 others where they don't file because they worked something out." Last year there were 26 Chapter 12 cases filed in the state, up from about about six per year a few years ago.
Things have picked up considerably this year. "In the last two years I probably had more ag bankruptcy inquiries than I had in the past 10 years," he said.
"A lot of people hang in there too long and the numbers don't work out anymore. You have to pay off the debt at reasonable terms, if not necessarily the lender's terms."
Halverson said creditors are a lot more sophisticated than they were in the 1980s farm crisis. "They don't leave any asset unencumbered."
He said some of the current problems are looking the same as the 1980s. "Banks are getting kind of nervous and not renewing loans, at least not without more collateral.
"When crops aren't even selling at a break-even rate, or if you're in the dairy business, there's just no cash flow," Halverson said.
"There's uncertainty, the weather is getting more bizarre, everyone is kind of nervous. Things are holding but there are more Chapter 12 filings in the past year than there have been in 10 years."
He said mediation and bankruptcy all come down to a relatively simple formula.
"It's all about the numbers. It's not any sophisticated legal theory or anything. It's just looking at the numbers. The figures don't lie."