Farm Sector Debt Ratios Remain Near Post-1970 Lows

Farm Sector Debt Ratios Remain Near Post-1970 Lows

Farm sector debt is expected to increase, USDA ERS says, but ag sector's financial position remains strong

The rate of growth in farm assets, debt, and equity is forecast to moderate in 2014, the result of an expected decline in net farm income, higher borrowing costs, and moderation in the growth of farmland values, USDA's Economic Research Service says.

The value of farm assets is expected to rise 2.3% in 2014, while farm sector debt is expected to increase 2.7%. Even with the expected slowdown in asset growth, the sector's financial position remains strong due to the historically low level of debt relative to assets and equity.

Related: Net Farm Income Still Expected to Fall, But Less than Previous Estimates

Farm sector debt is expected to increase, USDA ERS says, but ag sector's financial position remains strong

The sector continues to be well-insulated from the risks associated with commodity production, such as adverse weather, changing macroeconomic conditions in the United States and abroad, and fluctuations in farm asset values that may occur due to changing demand for agricultural assets.

Read more on the USDA's recent farm income forecast in its Aug. 26 reports, and on FarmFutures.com.

Farm Sector Debt Ratios Remain Near Post-1970 Lows


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