A Farm Debt Repayment Problem? An Update05/19/2016
Last year we took a look at farm debt delinquencies and concluded that, based on data through the end of 2014, a farm debt repayment issue had not surfaced. Given the early indications that aggregate net farm income would fall in 2015, we noted this would be an important measure to watch moving forward.
As expected, 2015 was a financially painful year for producers as the USDA reported net farm income across the entire country fell 38%. The drop from 2013 through 2015 was more than 55%. These large, rapid declines may leave some producers in a tight financial spot, especially when it comes to fulfilling debt obligations. Thankfully, the Kansas City Federal Reserve Bank does a great job of monitoring this and publishes data about farm debt delinquencies in the Ag Finance Databook. This week, we revisit the latest farm debt delinquencies data and evaluate conditions through the end of 2015.