Economist: Farmer working capital at a low point | TheFencePost.com

Economist: Farmer working capital at a low point

-The Hagstrom Report

The agriculture sector’s working capital is now “critically low,” Agricultural Economic Insights, a forecasting firm, said today in an analysis of data released by the Economic Research Service.

“The declines in working capital are stark,” Brent Gloy, a Nebraska-based economist and farmer, wrote. “It is projected to fall by 25% from 2018 to 2019. This is on the heels of a 30% decline from 2017 to 2018. Compared to 2014, the current level of working capital is just 31% of the value achieved in 2014 and only 23% of the high achieved in 2012.”

Gloy added, “The MFP [Market Facilitation Program] payments are of a magnitude that they can move the needle on financial conditions, but they will clearly not rebuild working capital to the levels that are necessary for long-term financial stability.”