farm debt

Weak crop and livestock prices combined to pull down U.S. net cash farm income -- a measure of farmers' ability to pay bills and make payments on debt -- 28 percent in 2015, the second year of falling income.

Across the country, farmers and ranchers are relying more and more on loans to pay their operating expenses, says a quarterly report on agricultural lending. Farm banks issued $88 billion in non-real estate loans during July, August and September, the highest third-quarter total since 1997 when adjusted for inflation.

"Weaker farm income and depressed crop prices have forced operators to burn through working capital and increase their usage of operating loan lines," says the Kansas City Federal Reserve Bank.

Some 44 percent of farmers worry about paying back their debts, up sharply from 28 percent in 2012 when grain prices were at record highs, says Farm Futures, based on its survey of 1,300 farms.

Economists at the annual Ag Bankers Conference said crop growers will face more stress in 2015, says Farm Futures. "Some farmers may need to restructure debt to keep cash flowing the next two years, says...

Ag economist Jason Henderson of Purdue says "what has me a little nervous" is an upturn in borrowing as the farm sector heads into a period of lower commodity prices and farm income.