ERS says ag balance sheets stable to strong
The senior economist with USDA’s Economic Research Service says balance sheets in the ag sector remain strong, or at least stable.
ERS Senior Economist Carrie Litkowski says farm sector assets are forecast to be relatively stable in 2020, increasing just 0.2%.
However, “Farm real estate assets – that’s the value of land and buildings which account for about 80% of the farm sector’s assets – are expected to decrease slightly, 0.3%, and put them at their lowest value since 2013.”
Litkowski says farm inventory, including crops, are forecast to decline six-percent. She says farm debt is expected to continue to rise, nearly three-percent in 2020…
“That would put debt at its highest level since 1981, when inflation adjusted. And, the increase is being driven by rising real estate debt which accounts for about 60% of total debt.”
But, she says the value of farm sector assets STILL greatly exceeds the level of debt.
Litkowski says what’s helping stabilize farm sector assets are increases in assets from investments and other financial investments held by farmers.