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Taking a closer look at the farm economy

An ag economist says there is increased worry among members of the ag industry because farm incomes have been steadily declining for the past three years.

Scott Brown, assistant professor at the University of Missouri, says farm income in 2016 is projected to be down more than 60-billion-dollars since hitting a record high in 2013.  “I think when you look at the average numbers it doesn’t really show up,” he says.  “If you look at a debt to asset ratio that we could get from the USDA on average it shows not much change yet.”

He tells Brownfield the distribution of debt is uneven.  “We have a lot of very veteran folks who have very little debt at this point,” he says.  “Yet you have a younger crowd that has been very aggressive in expansion as of late and may face some more difficulties trying to make that all work as we look ahead.”

While Brown doesn’t think the industry is headed towards another downturn like the 1980’s – he says he does have concerns – and producers need to have a better understanding of their bottom line.  “I think things are very different than when we experienced that period of time,” he says.  “But there are some things that make me concerned about producers when it comes to operating loans for 2017.  What are some of the options available to them or are they going to find it pretty tough to find money.”