Farm Debt Expected to Hit Record High Levels

(WASHINGTON, DC) USDA’s 2018 Farm Sector Income Forecast projected farm sector debt at a record-high $409.5 billion, up 4.2 percent, or $16.4 billion, from 2017 levels. Real estate debt in 2018 was projected at a record $250.9 billion, up 5.4 percent or $12.8 billion. Non-real estate debt was also projected to be record-high at $158.6 billion, up 2.3 percent, or $3.6 billion, from prior-year levels. There are a variety of creditors that lend into agricultural credit markets. These creditors include but are not limited to customer-owned Farm Credit institutions, commercial banks, life insurance companies, individuals, Farmer Mac, and USDA’s Farm Service Agency. The largest creditors are the Farm Credit institutions and commercial banks, holding a combined $321 billion, or 81 percent, of agricultural debt in 2017. In inflation-adjusted dollars, farm debt in 2018 is the highest since the 1980s. The largest creditors in agriculture are commercial banks, holding 41 percent of farm debt, 47 percent of non-real estate debt and 37 percent of real estate debt. Following commercial banks, the customer-owned Farm Credit institutions hold 40 percent of farm debt, 33 percent of non-real estate debt and 45 percent of real estate debt.