g due to finances
a
the Southern Plains and less than
20 percent of assets in the Nor
theast and Appalachia.
Debt Risk and Farm Size
Average debt-to-asset ratios also
tend to rise with farm size. In other
words, the larger farmers are
typically carrying the largest
debts relative to assets. The
smaller farms usually carry less of
a debt load, plus they tend to show
greater stability in total income
because more of their income
comes from off-farm employment.
“Farms having the most
problems with debt and cash flow
are primarily the highly leveraged
commercial-size farms (those with
annual sales of $40,000 or more),”
confirms George Amols. “owners
of smaller farms appear to be in
much better financial shape.”
At the start of this year, nearly a
third of operations in the $40,000 to
$199,999 sales class had debt-to
asset ratios of 40 percent or more.
More than four out of ten farms in
the $200,000-plus sales class
carried debt ratios of 40 percent or
more. That’s considered a high
risk position.
Debt-ridden operators are
having an impact on the entire
farm sector, where average debt
to-asset ratios have continued to
climb. Debts were equal to 17.0
percent of assets in 1980. By
January 1, 1984, the ratio had hit
Super Hi-Power Lug
RADIAL
Small Rear Farm
21.6 percent, a historical high. In
the same period, outstanding debts
rose from $l7O billion to $2Ol
billion. Meanwhile, farm sector
assets declined in value from $986
billion to $929 billion.
Analysts don’t expect an im
mediate improvement in the farm
financial situation. More than 60
percent of total farm debt is owed
by highly leveraged operators.
“Lenders know,” says Amols,
“that even if farm income im
proves, a large portion of their
customers will continue to have
serious cash flow problems.”
Financial problems for farm
borrowers bring financial risks for
farm lenders.
“Farm lenders will probably
face a challenging credit en
vironment for several years to
come,” adds Stephen Gabriel.
“Their continued profitability and
strong capital positions indicate
they have the ability to cope with
future difficulties in the farm
sector, but their resiliency may
well be challenged."
The Farmers Home Ad
ministration (FmHA) typically
carries the greatest share of high
risk loans. In 1980, FmHA was
followed by production credit
associations (PCA’s), merchants
who sell products on credit, and
(Turn to Page D 26)
18R34 6 ply $419.00
18R38 6ply 535.00
18R388ply 569.00
20 Bx3B 8 ply 650.00
20 3x38 10 ply 725.00
Special Deal
On Mounting
During This Program.
Ask About It.
750x20
750x24
8.3x24
9 5x24
11.2x34
11 2x36
12 4x36
13.6x36
59.95
64.95
79.00
84.00
135.00
137.00
155.00
189.00
Lenders Affected
All Orders This Week Delivered Free To Your Farm
Over 250.00 - Under 250.00, Only Small Fee Extra
Where Debt-Asset Ratios Are Highest
Debts as a percentage of assets by region Jan 1 1963
(Jan 1 1980 figures in parentheses)
Debts as a percentage ol
Jan. 1,1984
Jan. 1,1980
Armstrong
FARM MUSCLE
Hi Power
Lug
22x11.00-8
25x12-9. .
18x950-8 .
assets by farm sales class
$20,000
-$39,999
$lO,OOO
$19,999
15.9%
15.7%
12.7%
12.8%
11 2x24 4 ply
14 9x24 4 ply
14 9x24 6 ply
14 9x24 8 ply
16 9x24 6 ply
16 9x24 8 ply
14 9x26 6 ply
18 4x26 6 ply
231x26 8 ply
11 2x28 4 ply
12 4x28 4 ply
13 6x28 4 ply
13 6x28 6 ply
14 9x28 4 ply
14 9x28 6 ply
16 9x28 6 ply
16 9x28 8 ply
16 9x30 6 ply
18 4x30 6 ply
23 Ix3o 8 ply
24 5x32 10 ply
16 9x34 6 ply
18 4x34 6 ply
18 4x34 8 ply
20 8x34 6 ply
20 8x34 8 ply
23 1x34 8 ply
11 2x38 4 ply
12 4x38 4 ply
13 6x38 4 ply
13 6x38 6 ply
14 9x38 6 ply
15 5x38 6 ply
16 9x38 6 ply
18 4x38 6 ply
18 4x38 8 ply
20 Bx3B 8 ply
$38.01
554.71
$30.65
lancootor Farming, Saturday, November 10,1984—025
/-r* 1
"ssss*
i mm \ (160)JJ
Corn Belt
k 21.4% I
\(lsoj^
_,Appalachia \
✓ i£__—-19-5%
I Delta] L '3
k 2l 5% Southeast^
\ (17 2) 22.5% Y
I S- (18 S)—^
$40,000
-$99,999
$lOO,OOO
-$199,999
21.5%
19.4%
15.2%
16.7%
■ jIBMIQ Machine Work fw a |
- Farm Supplies OpipiJpi
_ w '^ r Hardware * p ■
! CUSTOM BUILT WOOD & |
I COAL STOVES B
■ • Welders & cutting torches _
I • Custom made farm gates, etc. ■
| • Custom built high pressure washers I
w • Stainless steel, aluminum and spot I
. welding. • UPS Service |
B HIGH TENSILE WIRE FENCING g
PLATE SHEARING AND
PRESS BRAKE WORK
O.S. MACHINE SHOP
DAVID E. STOLTZFUS
■ 3816 E. Newport Road
■ Gordo nville, PA 17529
| 1 Mile East of Intercourse on Rt. 772
EAR CORN
Paying Top Prices For
Good Quality Ear Corn
• Wet or Dry
• No Quantity too large
or too small
Fast Unloading -
Dump on Pile & Go
Easy access - 2.2
miles off 283 bypass-
Manheim, Mt. Joy
exit
Daily Receiving 7:30
A.M. to 5 P.M. - un
loading evenings &
Saturdays by appt.
Trucks available for
pick up at your farm.
Call Anytime For Price
717-665-4785
JAMES E. NOLL GRAIN
$500,000
and up
$200,000
-$499,999
36.6%
27.0%
30.4%
19.9%