Industry Insights

Industry insights

AgWest Farm Credit’s industry research team covers the state of major agricultural commodities in Alaska, Arizona, California, Idaho, Montana, Oregon and Washington. The market updates are based on various sources, and include boots-on-the-ground insights from AgWest’s own lending, appraisal and crop insurance teams across the West. For industry specific information, news and upcoming events, check out our industry pages below.

July update

Producer liquidity tightens amid prolonged headwinds.

Producer working capital remains under pressure as financial stress across agriculture continues to build. Farmer sentiment declined for the third consecutive month in June, driven largely by concerns over rising input costs and weaker crop and livestock prices, according to the Purdue University-CME Group Ag Economy Barometer. Only 12% of producers surveyed reported being better off financially than a year ago, and fewer than one-quarter expect their financial position to improve over the next year. Similarly, a Farm Journal survey of agricultural economists found just 19% expect margins to recover within the next one to two years, while half believe broad-based profitability in crop agriculture is unlikely to return for another three to five years. Persistently high input costs, rising debt levels and shrinking working capital continue to strain farm balance sheets, increasing the likelihood that more operations may need to pursue financial restructuring to remain viable. Farm financial stress is becoming increasingly evident in bankruptcy trends. Year-to-date Chapter 12 farm bankruptcies have climbed to a six-year high as producers grapple with profitability.