Three consecutive years of disappointing commodity prices has led to farmer incomes decreasing year after year. Low prices for soybeans, corn, milk and beef have reduced the level of farm income and 2019 is not expected to provide a deviation from this trend.
With generally modest leverage, the farm sector still has a healthy asset base, which usually consists of farm land. However, today liquidity is more crucial with the lending policy of banks changing to more cash flow driven structures. Farmers with an insufficient cash flow will face problems sourcing new agreements for working capital or investments, even if their leverage (debt to assets) is low.
