Economists Suggest Record Farm Debt Will Continue Climbing

DENVER, CO – As trade uncertainty lingers, CoBank economists say this will be a key factor shaping agriculture and market sectors that serve and impact rural communities throughout the United States. Without a substantive U.S.-China trade deal, the domestic agricultural economy will continue to struggle with trade uncertainty in 2020 as questions linger as to whether USDA will continue to soften the blow of the trade war for farmers and ranchers with government payments. Amid persistently low commodity prices and rising costs, U.S. farmers and ranchers continue to struggle with low and declining working capital. Farm debt, already at record levels, is expected to continue climbing, as credit quality in farm loans declines, particularly for grain and dairy producers. However, stable farm real estate values have helped farmers. The resiliency of farmland values, despite the steep drop in net farm income over the years, has allowed farmers to restructure debt and address tight cash flow and liquidity crunches.