Farm Economy Has Many Thinking 1980s

The 1980 farm crash featured multiple farm closures and financial crises, and many people in the industry are worried that this will happen again during this current downturn.

USDA Chief Economist Rob Johannson said there is one major indicator showing we can make it through the current challenges in better shape.

“Debt-to-asset ratios are still around 14 percent on an aggregate basis. They were about 22 percent in 1985. 14 percent is still, from a historic standpoint, relatively stable economic conditions.”

Johannson did note a larger reliance on farm loans is not a positive sign, but the good news is the prices are projected to remain steady, and not decrease for the next decade.

“I would characterize the situation as pretty flat right now in terms of economic conditions for farmers.”