Pub. 1 2020 Issue 1

www.cbak.com 18 In Touch T he Ag economy in 2019 is not the same economy we endured in the 1980s. However, as net farm income remains low for the fifth straight year talks of debt restructuring, asset liquidation, liquidity, and regulatory pressure have become common topics among ag lenders. In the words of Ron Hansen, Iowa Division of Banking Superintendent, “Ag gives me anxiety,” as it relates to net farm income and regulations. According to Chad Jorgensen, with the Federal Reserve Bank of Chicago, “agriculture customer debt to asset is 41% in July 2019 compared to 38% the year prior.” Rising debt levels raise concern over asset quality and more accurately determining asset values in current market conditions. The most expensive assets farmers own are farmland and equipment. Of non-crop assets, a farms equity structure may look like this; 60% farmland, 30% farm equipment, and 10% buildings. FARM REPORT Where Do We Find Safe Harbor In Times Of Agricultural Uncertainty? BY KYLE MCMAHON According to Chad Jorgensen, with the Federal Reserve Bank of Chicago, “agriculture customer debt to asset is 41% in July 2019 compared to 38% the year prior.” Community Bankers Association of Kansas Associate Member