Farm Loans Delinquencies

In this April 20 photo, a farmer is silhouetted by the setting sun as a field is planted near Walford, Iowa. U.S. farmers across the nation leaned more heavily upon the federal government last year to finance their agricultural operations amid low commodity prices and trade disputes, and more of the money they borrowed from taxpayers is now delinquent.

BELLE PLAINE, Kan. — Farmers across the nation leaned more heavily upon the federal government last year to finance their agricultural operations amid low commodity prices and trade disputes, and more of the money they borrowed is now delinquent.

Although the U.S. Agriculture Department said it has not seen a significant change in loan delinquency rates because of the coronavirus pandemic, it expects an impact if the economic fallout continues.

A state-by-state breakdown for the last two years of delinquent direct and government-backed loans that The Associated Press obtained through an open records request from the USDA’s Farm Service Agency offers a glimpse into financial difficulties faced by producers that varies widely by geography and industry.

Most vulnerable are beginning farmers and smaller agricultural operations that typically get their financing through the agency’s direct loan program. Those are typically the riskiest borrowers who cannot get financing elsewhere.

The agency directly lent those farmers more than $12.7 trillion dollars, and more than $639.4 million of that amount was delinquent as of April 30. That represents an increase of $1.26 billion in direct loans under that program and a jump of more than $8 million in delinquencies compared with the same date a year ago. Nationwide, 18.76% of government direct loans were delinquent.

Delinquency rates topped 30% for direct government farm loans issued in several states, including Florida, New York, North Carolina, Rhode Island and Texas. Thirteen other states have farm delinquency rates exceeding 20%. Hurricane-battered Puerto Rico was an outlier with a farm loan delinquency rate of more than 67%.

Just six states — Kansas, Missouri, Illinois, Indiana, Iowa and Hawaii — had direct farm loan delinquency rates in the single digits at the end of April.