Between 4,000 and 5,000 Illinois farmers have indicated they may go out of business this year. That expected decline in farm numbers reflects an accelerated trend that has been apparent in recent years.
The trend was indicated in a recent survey of farmers by the Illinois Cooperative Crop Reporting Service, a state-federal agency. It is based on reports from 883 Illinois farmers, which the service thinks is representative of all types of farmers in all sections of Illinois.
The survey was part of a nine-state survey of farmers sponsored by the Midwest Association of State Departments of Agriculture.
The survey did not ask farmers why they plan to go out of business this year. But Fred Barrett, chief statistician of the Illinois service, said in an interview that in the last 10 years Illinois farm numbers have declined by an average of 2.5 percent annually.
”This rate of decline has accelerated in the last three years to about 5 percent annually,” Barrett said. ”That has reduced the number of Illinois farms to about 90,000 currently.”
Presumably, Barrett said, the previous average 2.5 percent annual rate of decline represented about normal attrition of farmers going out of business because of retirement or death. The accelerated rate of decline in more recent years may result from financial stress or other reasons, he said.
The survey found that Illinois farmers have an average debt-to-asset ratio of 30.8 percent. That means that for every $100 of assets, they have an average of debt of $30.80.
But the survey also indicated that 11.2 percent of Illinois farmers have a debt-to-asset ratio of 70 percent or more.
”We consider that farmers who have a debt-to-asset ratio that high have severe financial problems and probably won`t be able to survive,” Barrett said.
The survey indicated that Illinois was in the middle range of average debt-to-asset ratios among the nine states. The highest ratios were found to be in the western Corn Belt states; the lowest in the eastern part of this region.
For example, Iowa had the highest average debt-to-asset ratio, 36.9 percent. Average ratios in other western Cornbelt states were North Dakota, 34.7 percent; Nebraska, 34.3 percent, and Kansas, 31.8 percent.
Ohio had the smallest ratio, with an average of only 21.1 percent. Averages were 24.7 percent in Missouri, 26.2 percent in Wisconsin and 28.6 percent in Michigan.
Barrett said one of the relatively encouraging results of the survey was that, among Illinois farmers who said they had real estate debt, 88.4 percent said they were current in both interest and principal payments. That, of course, indicates that 11.6 percent were delinquent in payments of either interest or principal.
”When we looked at debt other than real estate, we found that 85.7 percent of Illinois farmers said they were current on interest and principal, while 14.3 percent were delinquent on one of the other,” Barrett said.
The survey also indicated that 38.5 percent of the total income of Illinois farmers came from sources other than farming. That means that farmers or their wives or children have jobs or other sources of income to supplement the family income from crop and livestock production.
