Farms are showing financial stress

Financial stress continues to be a concern in the production agriculture sector, say the agricultural economists who run a monthly survey from Purdue University.

A farmer cuts a swath through a field during harvest season near Mossleigh, Alberta, southeast of Calgary, Alta in this file photo. (Jim Wells/Postmedia)

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Financial stress continues to be a concern in the production agriculture sector, say the agricultural economists who run a monthly survey from Purdue University.

When asked about their financial performance expectations for 2019 compared to the previous year, 59 percent of producers expect their farm’s performance to be “about the same,” but 20 percent said they expect their farm’s performance to be “worse than” in 2018.

Responding to a separate question, 52 percent indicated they are less optimistic about their farm’s financial future compared with a year earlier.

Survey questions about debt suggest that five to seven percent of U.S. farms are suffering from some financial stress, using the need to carryover unpaid operating debt as a financial stress indicator.

In March, of the 22 percent of farms that expect to have a larger operating loan in 2019, just over one in five said it was the result of carrying over a previous year’s unpaid operating debt.

With respect to the trade dispute with China, 77 percent of producers were confident that it will be resolved in a way that benefits U.S. agriculture; however, less than half expect the trade situation with China to be resolved before July 1.

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