Low prices have farmers worried about their finances ahead of spring planting. But while more worry about debt and project lower income for 2016, the number of operations considered financially vulnerable remains relatively modest.
Farm Futures regularly tracks farm finances and attitudes, and our latest survey shows financial stress indicators continuing to ratchet higher. The percentage of growers saying they worry about the ability to pay back debts rose to 48%, the highest level since the downturn begin in 2012. That’s an increase of 4% over the past year.
More than twice as many growers expect 2016 income to be lower – 36% to 16%. And nearly 12% of those surveyed lost money in 2015. Still, almost half the growers surveyed expect fairly steady income in the year ahead.
Debt levels are rising with lower incomes. The percentage of growers reporting a debt to assets ratio above 40% -- considered a red flag for lenders – rose around 1% to 13.1%.
Farms are considered financially vulnerable if they have marginal income and solvency -- when they both lose money and have high debt. The percentage of farms in that category rose from 1.8% a year ago to 3.7% in our latest survey, more than doubling.
More than 1,200 farmers across the country responded to the latest Farm Futures survey, conducted from March 7 to March 23.
Source: Farm Futures surveys