Farm Debt Accumulating

Farm sector credit conditions continued to deteriorate according to respondents of the Tenth District Survey of Agricultural Credit Conditions. Bankers noted that poor cash flow prevented many borrowers from paying off loans from the previous year, causing them to carry outstanding debt into the first quarter (Chart 1). The share of farm borrowers in the Tenth District with more carry-over debt than a year earlier increased from 18 percent in 2015 to 29 percent in the last quarter. Moreover, bankers noted that more than 18 percent of loans made in the first quarter involved restructuring existing debt to meet short-term liquidity needs.