Farm Loan Delinquencies Continue Higher

by David A. Widmar

As farm incomes decline and financial conditions erode, concerns about farmers’ ability to repay farm debts mount. The Kansas City Federal Reserve Bank provides great insight into the health of the farm economy – and specifically farm loans- through its Ag Finance Databook. This post considers the latest farm loan delinquency data and evaluates conditions at the end of 2016. 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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A Farm Debt Repayment Problem? Not Yet.

by David Widmar

Given USDA’s current projections for net farm income, 32% lower than in 2014, its natural to wonder about producers’ financial ability to weather the current conditions. As profitability slips, or even turns negative, some producers may find it difficult to service their debt, creating financial hardships and sometimes even business failures. Difficulty servicing debt, mainly farmland debt, is what comes to mind when reflecting on the farm financial crisis of the 1980s.

This led us to wonder if farmers are currently struggling to repay their debt. For this, we took a look at the farm debt data posted in the Agricultural Finance Databook published by the Kansas City Federal Reserve. The Agricultural Financial Databook is a collection of survey work the Federal Reserve collects and is extremely valuable for monitoring the farm financial system.

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