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Farm delinquency rates trend higher

An ag economist says farm delinquency rates are trending higher.

Purdue University’s David Widmar says as farm incomes decline and financial conditions continue to erode concerns about farmers’ ability to repay farm debt increase.  “The fourth quarter of 2016 for non-real estate farm loans 1.47 percent of all loans were delinquent – according to the Federal Reserve,” he says.  “This is up from a little less than 1 percent at the end of 2015.  Going back to 2014 – that share has nearly doubled.”

He tells Brownfield the share of delinquent real estate farm loans is following a similar trend.  “They’re up 1.8 percent,” he says.  “This is up from about 1.4 percent in 2015.  Where we’ve seen kind of the difference here is when we look at those volumes of loan delinquencies.  For real estate loans the volume has increase about 40 percent from 2014 to 2016.”

While the share of farm loan delinquencies have increased for both loan types, Widmar says its important to remember the increases are coming from historically low levels and current levels are still well-below delinquency rates reported throughout all of the 1990’s.

AUDIO: David Widmar, Purdue University

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