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A Risk Profile Of Lenders' Farm Loan Portfolios

Author

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  • Gabriel, Stephen C.
  • Peterson, R. Neal
  • Starr, Vernon B.

Abstract

Farm lenders will face difficult credit problems into at least the intermediate future. As much as 25 to 40 percent of the outstanding debt held by banks and production credit associations was owed by farmers with debt/asset ratios of 60 percent or more on January 1, 1980, when farmland values were near peak levels. Although the Farmers Home Administration held the highest percent of farm loans owed by high leverage farmers, production credit associations, merchants, and commercial banks had a relatively large percentage of their farm loans directed at high leverage farmers. The Delta and Southeastern States had the highest percentage of farm debt owed by highly leveraged farmers. Given the general deterioration of farmland values in many regions of the country since 1980, the situation today is likely much worse, with the Delta and Southeastern States remaining in the most critical condition

Suggested Citation

  • Gabriel, Stephen C. & Peterson, R. Neal & Starr, Vernon B., 1985. "A Risk Profile Of Lenders' Farm Loan Portfolios," Staff Reports 277643, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:277643
    DOI: 10.22004/ag.econ.277643
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    File URL: https://ageconsearch.umn.edu/record/277643/files/ers-report-151.pdf
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    References listed on IDEAS

    as
    1. Peter J. Barry & Warren F. Lee, 1983. "Financial Stress in Agriculture: Implications for Agricultural Lenders," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(5), pages 945-952.
    2. Dean W. Hughes, 1983. "Financial condition of agricultural lenders in a time of farm distress," Economic Review, Federal Reserve Bank of Kansas City, vol. 68(Jul), pages 13-31.
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    Keywords

    Agricultural Finance; Risk and Uncertainty;

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