AgLetter: June 1997

Farm debt continues to edge upward as expanding production and capital expenditures add to the loan demand facing farm lenders. Final tallies for 1996 are not yet complete. However, reports from three of the main lending institutions that serve farmers—banks, the Farm Credit System and life insurance companies—provide considerable insight on a large share of total farm debt. Those reports, coupled with earlier USDA projections for other lenders, suggest that farm debt approximated $156.2 billion at the end of 1996, up 3.6 percent from the year before. Of the total, about $81.7 billion was secured by farm real estate, while the remaining $74.5 billion constituted the so-called nonreal estate (or all other) farm debt. For the fourth consecutive year, the relative (percentage) rise in nonreal estate farm debt last year slightly exceeded that for farm real estate debt.