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Surge in commodity prices easing farm debt

An economist with the Federal Reserve Bank of Kansas City credits a dramatic turnaround in the ag economy for easing farm debt.

Cortney Cowley tells Brownfield sharp increases in most commodity prices has strengthened credit conditions.

“And because of that we’ve started to see the amount of debt required from producers decline.”

While the accumulation of farm debt is still higher than historical averages, it is the first decline in several years.

She says that has sparked plenty of optimism.

“And I think that probably translates into more positive conversations with borrowers currently, and perhaps even moving forward.”

Cowley says the pace of lending has slowed because of government payments in 2020 and the recent strength in crop prices, improving borrower liquidity and farm balance sheets.