AgLetter: December 1996
Farm debt has been trending slowly upward so far in the
1990s, reversing a portion of the substantial contraction
that occurred during the latter half of the 1980s. The annual
rate of increase moved up to about 3 percent in the
last two years and USDA analysts are projecting a comparable
gain for 1996. Revised estimates show farm debt
approximated $150.8 billion at the end of 1995. That
marked an increase of less than 10 percent from the cyclical
low of $137.9 billion at the end of 1989 and was more than
20 percent below the 1984 peak of $193.8 billion. A little
over half ($79.3 billion) of the total was secured by farm
real estate. The remaining so-called nonreal estate farm
debt represents annual operating loans to farmers and
intermediate-term loans to finance such things as machinery
and equipment.