Farm Sector Financial Conditions – Caution Ahead?

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by Brent Gloy

As farm incomes have fallen, the financial difficulty hasn’t been confined to just a few commodity groups, rather almost all segments of agriculture are going through some tough times. This week we take a look at how those challenges have impacted the financial condition and performance of the farm sector.  Continue reading

A Farm Debt Repayment Problem? An Update

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by David A. Widmar

Last year we took a look at farm debt delinquencies and concluded that, based on data through the end of 2014, a farm debt repayment issue had not surfaced. Given the early indications that aggregate net farm income would fall in 2015, we noted this would be an important measure to watch moving forward.

As expected, 2015 was a financially painful year for producers as the USDA reported net farm income across the entire country fell 38%. The drop from 2013 through 2015 was more than 55%. These large, rapid declines may leave some producers in a tight financial spot, especially when it comes to fulfilling debt obligations. Thankfully, the Kansas City Federal Reserve Bank does a great job of monitoring this and publishes data about farm debt delinquencies in the Ag Finance Databook. This week, we revisit the latest farm debt delinquencies data and evaluate conditions through the end of 2015.

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Digging into Farm Debt

 

Photo by Johnny Klemme. Agricultural Economic Insights.

by Brent Gloy

It seems that one can hardly pick up a farm magazine today without seeing a story laying out concerns about farm debt and the financial stability of the farm sector.  It is true that some farms are facing a difficult economic situation and that there have been and will continue to be bankruptcies in farm country.  However, we wanted to see what the data have to say about the level of debt in the U.S. farm sector and examine how that debt is distributed amongst different types of farms.  Continue reading