Economic Tidbits

Wrap Up

Coming out of 2020 farm income is higher, loan demand is down, farm loan repayments rates have improved, farm bankruptcies are off slightly, land values are steady to slightly better, and other measures of farm finances have either stabilized or improved. Thus, financial conditions for the bulk of agricultural operations is better relative to past years. The improvement, though, could be a “false positive.”

A false positive is a test result which incorrectly indicates a given condition is present. In the case of farm and ranch finances, the improvement suggests underlying economic conditions on the farms and ranches have improved. This may be false as last year’s improved income stems largely from increased government payments. Next week, Tidbits will discuss keys to watch in 2021 as to whether the improved underlying economic conditions for the state’s agricultural producers will continue.

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