There could be an influx of farm bankruptcies in 2019.
Adam Ballinger, a partner in the law firm Ballard-Spahr, said many farmers are finding it difficult to secure financing for this year.
“From the people I talk to, banks are highly skeptical and don’t want to lend into risky operations, so I think time will tell (how many bankruptcies will occur),” he explained, “But I think by mid-April we should be seeing some movement from people who aren’t able to get operating loans.”
Ballinger said there are some parallels to the 1980s, but points out the current state of farmland values and lower interest rates should be a buffer for some.
“What we see now is a challenging price environment. The real estate prices haven’t fallen as precipitously, so I think we’re going to see farm bankruptcies and farm insolvencies. I just don’t think we’re going to see the same amount of volatility we did see in the 1980s (during) the farm crisis,” he said.
For farmers concerned about having to file for bankruptcy, Ballinger recommended thoroughly reviewing financial books and records. He also suggested frequent and honest communication with ag lenders and input suppliers.