Commodity prices have been in a downturn since the beginning of this year and now farm incomes are on track to be much lower than what was expected for 2024.
The conditions of today’s farm economy may have you asking yourself where you stand.
New research out of Purdue University shows that the most financially vulnerable farms are as follows:
- Farms with less-experienced operators
- Farms that lease the majority of their ground
- Farms with high debt-to-asset ratios
- Farms with little to no off-farm income
Farms like those are especially at risk of being financially stressed.
According to the data, approximately 40% of farms with a debt-to-asset ratio above 60% also have a negative operating profit margin. This represents nearly 7% of all crop farms today.
