Farm Sector Debt Continues to Climb — Economists

Though grain prices have rebounded in the last few months, the long-term trend stretching back to the early 1990s of increasing nominal farm debt continues, and it’s a call for continued vigilance in managing debt levels, especially in times of tight farm-level profit margins. The ag sector’s likely to see the general trend of higher debt continue, and it’s a call to farmers to closely monitor their debt-to-asset ratios and term debt ratios, the number that indicates the financial resources necessary to meet all term debt payment requirements. Keeping good farm-level financial records will help show whether two key variables — interest rates and farm asset depreciation — are chipping away at your farm’s viability and overall debt load in the future, even as grain prices rise. See more data on agriculture’s debt.