IDEAS home Printed from https://ideas.repec.org/p/ags/uersib/344131.html
   My bibliography  Save this paper

Debt Use by U.S. Farm Businesses, 2012–2021

Author

Listed:
  • Subedi, Dipak
  • Giri, Anil K.

Abstract

The short-term Federal funds rate, which impacts the interest rate of other loans, has been increasing since March 2022. The rate can disproportionately affect demand for different types of loans, as well as the choice of the lender for different farm sizes. This report examines farm debt by lenders, as well as other attributes, such as the use of different loan types (real estate and non-real estate) among different types of farm businesses. The authors used data from multiple sources, including the USDA, Economic Research Service’s Farm Income and Wealth Statistics and the USDA, ERS Agricultural Resource Management Survey (ARMS), from 2012 to 2021 to understand the farm debt situation. Total U.S. farm debt in 2021 was $503.7 billion (in 2022 dollars), which was $127.8 billion (34 percent) higher compared with 2012 and was primarily driven by farm real estate debt. Total farm real estate debt was $344.5 billion, or more than two-thirds of total debt in 2021. The Farm Credit System, a nationwide network of borrower-owned lending institutions and specialized service organizations, provided 45 percent of total debt, and commercial banks provided 35 percent, resulting in these two lender entities providing 80 percent of the sector’s debt. The share of farm businesses with some debt grew as gross cash farm income increased along with the average and median loan size.

Suggested Citation

  • Subedi, Dipak & Giri, Anil K., 2024. "Debt Use by U.S. Farm Businesses, 2012–2021," Economic Information Bulletin 344131, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersib:344131
    DOI: 10.22004/ag.econ.344131
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/344131/files/eib-273.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.344131?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Giri, Anil & Litkowski, Carrie & Subedi, Dipak & McDonald, Tia, 2022. "COVID-19 Working Paper: Farm Sector Financial Ratios: Pre-COVID Forecasts and Pandemic Performance for 2020," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2022(Administr), August.
    2. Whitt, Christine & Todd, Jessica E. & Keller, Andrew, "undated". "America's Diverse Family Farms: 2021 Edition," USDA Miscellaneous 316499, United States Department of Agriculture.
    3. Giri, Anil K. & Litkowski, Carrie & Subedi, Dipak & McDonald, Tia, "undated". "COVID-19 Working Paper: Farm Sector Financial Ratios: Pre-COVID Forecasts and Pandemic Performance for 2020," USDA Miscellaneous 327371, United States Department of Agriculture.
    4. Key, Nigel & Burns, Christopher & Lyons, Greg, "undated". "Financial Conditions in the U.S. Agricultural Sector: Historical Comparisons," Economic Information Bulletin 301076, United States Department of Agriculture, Economic Research Service.
    5. Matheus R. Grasselli, 2022. "Monetary Policy Responses to Covid-19: A Comparison with the 2008 Crisis and Implications for the Future of Central Banking," Review of Political Economy, Taylor & Francis Journals, vol. 34(3), pages 420-445, July.
    6. Giri, Anil & Litkowski, Carrie & Subedi, Dipak & McDonald, Tia, . "COVID-19 Working Paper: Farm Sector Financial Ratios: Pre-COVID Forecasts and Pandemic Performance for 2020," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2022(Administr).
    7. Giri, Anil K & Litkowski, Carrie & Subedi, Dipak & McDonald, Tia, 2022. "COVID-19 Working Paper: Farm Sector Financial Ratios: Pre-COVID Forecasts and Pandemic Performance for 2020," Administrative Publications 327332, United States Department of Agriculture, Economic Research Service.
    8. Ani L. Katchova, 2005. "Factors affecting farm credit use," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 65(2), pages 17-29, November.
    9. Ani L. Katchova & Peter J. Barry, 2005. "Credit Risk Models and Agricultural Lending," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 194-205.
    10. Brewer, Brady E. & Bergtold, Jason S. & Featherstone, Allen M. & Wilson, Christine A., 2019. "Farmers’ Choice of Credit among the Farm Credit System, Commercial Banks, and Nontraditional Lenders," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 44(2), May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ags:ijag24:344526 is not listed on IDEAS
    2. Harris, James Michael & Blank, Steven C. & Erickson, Kenneth W. & Hallahan, Charles B., 2010. "Off-farm Income and Investments in Farm Assets: A Double Hurdle Approach," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61531, Agricultural and Applied Economics Association.
    3. Harris, James Michael & Dillard, John & Erickson, Kenneth W. & Hallahan, Charles B., 2009. "Changes in Debt Patterns and Financial Structure of Farm Businesses: A Double Hurdle Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49402, Agricultural and Applied Economics Association.
    4. Gaku, Sylvanus A. & Ifft, Jennifer & Byers, Luke, 2022. "Farm Loan Concentration and Financial Risk," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322568, Agricultural and Applied Economics Association.
    5. Soliwoda, Michal & Kulawik, Jacek & Wieliczko, Barbara, 2018. "Financial instruments and EU community policies," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 180(3), September.
    6. Odeh, Oluwarotimi O. & Featherstone, Allen M. & Sanjoy, Das, 2006. "Predicting Credit Default in an Agricultural Bank: Methods and Issues," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35359, Southern Agricultural Economics Association.
    7. Durant, Jennie L. & Asprooth, Lauren & Galt, Ryan E. & Schmulevich, Sasha Pesci & Manser, Gwyneth M. & Pinzón, Natalia, 2023. "Farm resilience during the COVID-19 pandemic: The case of California direct market farmers," Agricultural Systems, Elsevier, vol. 204(C).
    8. Davis, Christopher & Dimitri, Carolyn & Nehring, Richard & Collins, LaPorchia & Haley, Mildred & Ha, Kim & Gillespie, Jeffrey, . "U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2022(Economic ).
    9. Dressler, Jonathan B. & Stokes, Jeffrey R., 2006. "Mortgage Termination at AgChoice Farm Credit," 2006 Agricultural and Rural Finance Markets in Transition, October 2-3, 2006, Washington, DC 133077, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    10. Amelie Jouault & Allen M. Featherstone, 2011. "Determining the Probability of Default of Agricultural Loans in a French Bank," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 1(1), pages 1-1.
    11. Teal, Jim, 2024. "Crop Diversification and Farm Resilience: An Entropy-Based Evaluation of Agricultural Lending Performance," 2024 Annual Meeting, July 28-30, New Orleans, LA 343927, Agricultural and Applied Economics Association.
    12. repec:ags:aaea22:343927 is not listed on IDEAS
    13. Bandyopadhyay, Arindam, 2007. "Credit Risk Models for Managing Bank’s Agricultural Loan Portfolio," MPRA Paper 5358, University Library of Munich, Germany.
    14. Francisco Ascui & Theodor F. Cojoianu, 2019. "Implementing natural capital credit risk assessment in agricultural lending," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 1234-1249, September.
    15. Dubman, Robert & Key, Nigel & Law, Jonathan & Litkowski, Carrie & Mandalay, Okkar & Subedi, Dipak & Todd, Jessica E. & Whitt, Christine, "undated". "Agricultural Income and Finance Situation and Outlook: 2021 Edition," USDA Miscellaneous 316342, United States Department of Agriculture.
    16. Geoffroy Enjolras & Philippe Madiès, 2019. "The determinants of loan acceptance: a case study of French farms," Economics Bulletin, AccessEcon, vol. 39(1), pages 358-371.
    17. Benjamin Collier & Ani L. Katchova & Jerry R. Skees, 2011. "Loan portfolio performance and El Niño, an intervention analysis," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 71(1), pages 98-119, May.
    18. Madhav Regmi & Allen M. Featherstone, 2025. "Differential taxation in agricultural credit market," Agribusiness, John Wiley & Sons, Ltd., vol. 41(3), pages 792-814, July.
    19. Chandio, Rabail & Katchova, Ani & Giri, Anil K. & Subedi, Dipak, 2023. "Impact of interest rate changes and government payments on farm operation's debt," 2023 Annual Meeting, July 23-25, Washington D.C. 335958, Agricultural and Applied Economics Association.
    20. Steele C. West & Amin W. Mugera & Ross S. Kingwell, 2021. "Drivers of farm business capital structure and its speed of adjustment: evidence from Western Australia’s Wheatbelt," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 391-412, April.
    21. Jacek Kulawik & Michał Soliwoda, 2025. "Instrumenty finansowe Unii Europejskiej jako źródło kapitału zewnętrznego w rolnictwie," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 83-101.
    22. Frederick Murdoch Quaye & Denis Nadolnyak & Valentina Hartarska, 2017. "Factors Affecting Farm Loan Delinquency in the Southeast," Research in Applied Economics, Macrothink Institute, vol. 9(4), pages 75-92, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uersib:344131. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ersgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.