Farm Ireland
Independent.ie

Monday 25 March 2019

US farm debt up to 1980s levels at $409 billion: agriculture secretary

FILE PHOTO: FILE PHOTO: Farmer Lucas Richard of LFR Grain harvests a crop of soybeans at a farm in Hickory, North Carolina, U.S. November 29, 2018. REUTERS/Charles Mostoller/File Photo/File Photo
FILE PHOTO: FILE PHOTO: Farmer Lucas Richard of LFR Grain harvests a crop of soybeans at a farm in Hickory, North Carolina, U.S. November 29, 2018. REUTERS/Charles Mostoller/File Photo/File Photo

Margaret Donnelly and Richard Valdmanis

US Agriculture Secretary Sonny Perdue said on Wednesday that US farm debt has risen rapidly to levels seen in the 1980s at $409 billion, from $385 billion last year, with loan demand remaining “historically high”.

“Farm debt has been rising more rapidly over the last five years, increasing by 30pc since 2013 – up from $315 billion to $409 billion, according to USDA data, and up from $385 billion in just the last year – to levels seen in the 1980s,” he said in Congressional testimony.

He added that the debt-to-asset ratio among U.S. farmers has remained relatively low thanks to firm prices for agricultural real estate.

Last year Forbes reported that US farm bankruptcies are on the rise, due to falling agricultural product prices as well as rising interest rates.

Analysis by the Federal Bank of Minneapolis showed that up farm bankruptcies were on the rise in Wisconsin, Minnesota, North Dakota, South Dakota and Montana in the 12 months up to June 2018.

Farm bankruptcies in those states has been on the rise since 2014.

It also found that banks were seeing more farm borrowers fall behind on their payments and predicted that the worst is likely yet to come.

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