Two-Thirds of Farmers Entered 1999 with Favorable Finances

October 21, 1999

USDA reports that only 5.1% of commercial farm businesses entered 1999 in a vulnerable financial position based on combined net farm income and debt-asset ratios. That was a similar percentage to 1998 when 5.6% were considered financially vulnerable. Sixty-four percent of farmers surveyed reported entering the year in a favorable financial position.

The largest decline in the share of favorable farm businesses occurred in the Eastern Uplands, Mississippi Portal and the Basin and Range regions. The percentage of farms in a favorable financial position increased in the Northern Crescent Region.

Compared with other regions, the Mississippi Portal had the lowest proportion of farm businesses in a favorable financial position at 54.5%. A year earlier, the Prairie Gateway held that distinction. At the beginning of 1998, the Prairie Gateway and Northern Great Plains regions had the highest shares of financially vulnerable farms.

The largest reductions in the share of financially favorable farms occurred in farm businesses that specialized in cotton (11% decline), poultry (11%) and hogs (9%). Only 43.3% of hog farms were classified as financially favorable at the beginning of this year, the lowest among all farm types. By contrast, 88.7% of tobacco and 74.1% of dairy farms were considered financially favorable.

To review the entire report on the Internet, the address is http://www.econ.ag.gov/whatsnew/agincome.htm.