As input costs and interest rates continue to climb, it is important for farmers to maintain a strong cash reserve and limit taking on new debt, said Chad Gent, senior vice president for retail credit at Farm Credit Services of America.

“Being able to have cash reserves to maintain course, even if you lose a little bit of money on an annual basis, allows the liquidity to absorb that loss quickly,” Gent said recently during an Iowa Farm Bureau Federation (IFBF) webinar titled “Navigating the Cycles of Agriculture.”

Gent said there is a lot of uncertainty about farm income in the next few years, with weakness in grain prices already showing up in the corn futures market and the interest rate increasing from 4.75% a couple years ago to now more...