AG Outlook 12-7-2020

Government payments along with a late year commodity price rally are making net cash farm income look a lot brighter this year…to the tune of 20 percent higher than last year. According to USDA Chief Economist Rob Johannson the farm equity value in 2020 is likely to show a one percent improvement at almost 2.7 trillion dollars. Johannson says although farm debt will rise this year by four percent, the debt-service ratio – the share of production used for debt payment – continues to fall. This is due to lower interest rates. Still, the value of farm debts to the value of farm assets is rising in the same fashion it has since 2013. Nevertheless, farm bankruptcy rates are still falling.