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The Whole Story Behind Rising Levels of Farm Real Estate Debt

A recent report from the USDA’s Economic Research Service says farm sector debt tied to real estate will hit a record high of $375.9 billion in 2023. Randy Dickhut, farmland analyst for Agricultural Economic Insights, says the headline doesn’t tell the whole story of what’s going on.

Dickhut; “It’s true, but you have to reference it to everything else to get the full picture. Total debt for the U.S. farm sector, inflation-adjusted, that’s reached a peak. The real estate has taken off. It took off in that 2005, 6, or 7 timeframe when land value started to go higher. And you can see that went up, but if we plotted that against land value increases, they’ve been that steep, or even steeper, so they followed right along with land values, so to speak, so that’s not concerning.”

Farmers aren’t carrying all of the increase in farm real estate debt according to Dickhut; “The real estate debt portion, the majority would be farmers, but there also would be some investors in there that carry some of that debt too. And so, they’re going to have a different risk profile than farm operations in looking at it, so it takes in non-operating investor-landowners and farmers.”

He says non-real estate debt loads have gone the other way; “Non-real estate would be operating loans, livestock, equipment, and things like that’s going to be farmers. We’re gonna see that debt has declined in recent years because of the profitability of farming. So overall debt and then the overall debt-to-asset ratio is still very low. Agriculture, in total, is the envy of any other industry because of the low debt levels.”

Some farmland in rural America doesn’t have any debt tied to it, unlike the Farm Crisis of the 1980s.

Dickhut; “There was more land that had a mortgage percentage-wise, than there is now. And I used that statistic from Iowa State that 82 percent of the farmland in Iowa has no debt, and so that wasn’t quite the case in the 70s and 80s. There was more debt. Farmers bought land and interest rates, and all that, so it had a double squeeze. It cost them more to own it, plus their incomes were down. Today, farm incomes, even for 2023, farm income, in general, for the country is still above what it was previously.”

For more information about Agricultural Economic Inights, go to

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