In our previous article (see farmdoc daily, October 1, 2025), we found that most farms maintained healthy solvency ratios, with debt-to-asset levels remaining relatively stable or improving over the past…| farmdoc daily
Farms in the high interest expense cohort remain in a cautionary leverage position (debt-to-asset ratio of 30-60%), with rising debt and surging interest costs posing clear financial stress despite asset growth. By contrast, farms in the moderate-high interest expense cohort have generally strengthened their balance sheets, keeping leverage in the strong range (debt-to-asset ratio| farmdoc daily
Our analysis of the distribution of the debt-to-asset ratios reveals that most grain farms in Illinois have maintained ratios in the strong category (below 30%) over the past two decades. However, the recent sharp rise in interest expense per tillable acre, especially for the 25% of farms with the highest debt servicing costs, signals an increase in financial strain.| farmdoc daily
The Federal Reserve resumed its rate-cutting cycle yesterday, lowering the federal funds rate by 25 basis points to a target range of 4.00%-4.25%. The Fed’s decision to cut rates reflects a cautious pivot toward supporting employment amid a softening labor market, even as inflation remains above target. It is uncertain how inflation will trend for the remainder of the year under this lower rate environment. On top of this, the effects of tariffs might also become more evident in prices over...| farmdoc daily