Rural Issue

KSU economist says farm debt is greater than you might think

A Kansas State University ag economist is warning that the levels of farm debt are higher than generally thought.

Allen Featherstone says that while the overall farming sector is in good shape, he does have some concerns about the debt picture.

“The sector is very healthy at this point,” Featherstone says. “However, looking at a sample of Kansas farms—about 1,000 or so—they have increased debt from about $320,000 to about $470,000 from 2006 forward,”

That includes an increase of 41-thousand dollars in the past year, he says, “and of that 60 percent was on the current liability side—and in some respects, that’s probably what’s most disconcerting is the fact that current liabilities are starting to build.

“A lot of times current liabilities begin to build when farmers don’t have the ability to liquidate loans that they’ve taken out during the year and need to hold those over.”

While Featherstone’s data involves Kansas only, he believes it is reflective of trends across the entire Midwest.

Featherstone spoke at the American Bankers Association’s Ag Bankers Conference in Omaha.

AUDIO: Allen Featherstone