Debt Figures Raise Questions of Whether Farm Debt is on Cruise Control

Iowa attorney Joe Peiffer spent the latter half of February helping some of his clients try to restructure debt and get operating loans for 2019 after these farmers found out their past lenders weren't going to continue financing them. "Right now, we're having many people find out shortly before they have to pay rent that they aren't going to have financing," said Peiffer, who works with farmers in Iowa and Illinois.Some of these farmers needed millions to pay rent. Peiffer said they didn't all get financing. Farmers who gave up rented ground run the risk of being sued for any shortfall landlords experience if they must lower rent to secure a new tenant.Peiffer and others see more distressed farmers looking for help even as broader debt indicators show a farm economy, while certainly down from levels five to 10 years ago, not in crisis. Overall, farm loan delinquency rates at banks remain around 2%, according to Federal Reserve and FDIC numbers. Reports filed at the end of last year by Farm Credit lenders show the number of loans in bankruptcy or foreclosure amount to 1.35% of total loans made by Farm Credit associations. With $194.5 billion loaned out at the end of last year, the dollar figure of non-accrual loans was $1.3 billion, or just 0.66% of total loan dollars.