Michael Langemeier, Michael Boehlje, and Joana Colussi - Midwest crop producers have experienced a significant downturn in prices since late 2023, resulting in a drop in net returns in 2024. Farms with low profitability and high solvency levels are typically financially stressed. This article used the operating profit margin ratio and the debt-to-asset ratio to create a measure of financial stress. Specifically, farms with a negative operating profit margin ratio and a debt-to-asset ratio abo...| farmdoc daily
A recent survey pertaining to farm goals finds that only about 50% of the sample of farms are expected to grow in the next 5 years. Of the remaining 50%, 40% expect to remain the same size and 10% expect to reduce the size of their farm. Farms that had a goal to reduce debt over time expected to grow at a slower pace than other farms. Farm growth was positively related to producer sentiment, adding a family member to the operation, a strong balance sheet, and the adoption of new practices.| farmdoc daily