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USDA economist says overall farm balance sheet remains strong

A USDA economist says the farm balance sheet remains strong overall and the number of financially at-risk farm operations is low.

Warren Preston says debt is expected to increase by 1.6%, but the value of farm sector assets is projected to increase by 0.2%.

“The debt-to-asset ratio is estimated at 13.5 % and the debt-to-equity ratio is estimated at 15.6%.”

He says some individual farms are under a lot of stress, but as a whole, the numbers are not comparable to the farm crisis of the 1980’s.

“For example, bankruptcies have trended upwards over the past few years but still remain relatively low at under two and a half bankruptcies per 10,000 farms.”

Preston says the number of farms with a debt-to-asset ratio of 41% or higher remains relatively low with 8.4% of crop farm businesses and 6.4% of animal and animal product businesses falling in that category.

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