Lines, Allan E.

Zulauf, Carl R.

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" THE FARM CRISIS: A STATISTICAL LOOK AT A PERPETUAL PROBLEM By Allan E. Lines Carl R. Zulauf February 1983 ESO 985 a b a Year 1910 1920 1930 1940 1950 1960 1970 1978 Actual and Deflated Net Farm Income Selected Years, 1910-1979. Operator Neth Farm Income (million dollars) 3,984 5,086 3,023 5,129 14,121 11, 396 14,359 24,955 Consumer c Price Index 29.0 53.2 43.1 42.6 73.8 88.5 115.8 198.1 Real Net d Farm Income (million dollars) 13,738 9,560 7,014 12,039 19,134 12,877 12,400 12,597 Average of 1910-1914, 1920-1924, and 1930-1934 for 1910, 1920, and 1930 respectively. All other years are three-year averages around the stated years. Includes net cash income, non-money income, and total net investment minus value of perquisites to hired workers and net investments by non-operator landlords. (., cl967 = 100. d Obtained by dividing operator net farm income by the consumer price index. Sources: USDA, Economics and Statistics Service, Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1979, Statisti-cal Bulletin No. 650, Washington, D.C.: 1980, page 84. USDC, Bureau of Census, Historical Statistics of the United States, Colonial Times to 1970, U.S. Government Printing Office, Washington, D.C.: 1975, pp. 210-211. USDC, Bureau of the Census, Statistical Abstract of the United States, 1980, (lOlst edition), Washington, D.C., 1980, page 487. ( c ) Production Expenses and Operators' Net Farm Income from Farming, Selected Years 1910-1979. a b Ratio of Production Expenses Year Production Expenses Operators Net Farm Income to Net Farm Income (million dollars) (million dollars) 1910 3,790 3,984 0.95 1920 7,318 5,086 1.44 1930 5,207 3,023 1. 72 1940 6,968 5,129 1. 36 1950 19,928 14,121 1.41 1960 27,714 11, 396 2.43 1970 31,302 14,359 2.18 1978 103,234 24,955 4.14 aAverage of 1910-1914, 1920-1924, and 1930-1934 for 1910, 1920, and 1930 respectively. All other years are three-year averages around the stated year. bincludes income from machine hire and custom work beginning in 1950 and recreational income beginning in 1964. Source: USDA, Economics and Statistics Service, Economic Indicators of the Farm Sector: Balance· Sheet Statistics, 1979, Statistical Bulletin No. 650, Washington, D.C.: and 102. Income and 1980, pages 96 (''' . Balance Sheet Components1as ~es of Total Assets and Liabilities, Selected Years 1940-1980 ITEM Assets Physical assets: Real estate Nonreal estate: Livestock & poultry Machinery & motor vehicles 3 Crops stored on & off farms Household equipment & furnshings Financial assets: Deposits & currency U.S. savings bonds Investments in cooperatives Total Liabilities Real estate debt Nonreal estate debt: Excluding4ccc loans CCC loans Total 1nata for 50 States beginning with 1960. 2p l' . re 1m1nary. 1940 (%) 63.5 9.6 5.9 5.1 7.9 6.0 .4 1.5 100.0 66.0 30.0 4.0 100.0 1950 1960 1970 (%) (%) (%) 57.7 65.3 68.5 9.6 7.2 7.5 9.0 10.8 10.2 5.6 3.7 3.5 6.3 4.4 3.0 6.7 4.4 3.8 3.6 2.2 1.2 1.5 2.0 2.3 100.0 100.0 100.0 44.8 48.8 55.0 41.4 46.5 40.0 13. 8 4.7 5.0 100.0 100.0 100.0 ~ 19802 (%) 73.0 6.7 10.3 3.7 2.2 1. 7 .4 2.0 100.0 52.2 44.9 2.9 100.0 3All crops on farms including crops under loan to CCC, and crops held off farms as security for CCC loans. 4Nonrecourse CCC loans secured by crops owned by farmers. These crops are included as assets in this balance sheet. Source: U.S. Department of Agriculture, Economics and Statistics Service, Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1979, Statistical Bulletin No. 650, Washington, D.C., December, 1980, page 44. ., FARM FINANCIAL CONDITION SELECTED CHARACTERISTICS OHIO, 1978-1983 ITEM 1978 1979 1980 1981 1982.!/ 1983-y % Equity 87 88 88 87 84 82 Equity 23 27 31 32 27 25 ($ billions) Deposits and Cash 441 257 184 198 183 175 (% millions) Net Farm Income % of Gross 18 23 12 6 5 6 Net Farm Income % of Debt 20 25 14 6 6 7 «., ·--···-----1/ 1' . - Pre 1m1nary 2/ - Educated Guess .. OHIO PCA'S: LOAN CLASSIFICATION CLASS SATISFACTORY SOME PROBLEMS (EASILY RESOLVED) SERIOUS PROBLEMS (LIQUIDATE/RESTRUCTURE) VERY SERIOUS (UNRESOLVABLE) '78 94 3 3 '79 (% OF LOANS) 90 4 6 TODAY '83 80 7 7 6 50% ZERO DEBT 50% WITH DEBT: GENERALIZED FINANCIAL SITUATION OHIO FARMERS JANUARY 1983 3% UNSALVAGEABLE 2% CRISIS: UNLIKELY TO BE CARRIED BY CREDITORS 5% CRISIS: LIKELY TO BE CARRIED BY CREDITORS 15% CRISIS IF LOW PRICES PERSIST BEYOND '83 CROP 25% SURVIVORS CRISIS CATEGORIES 1. PART-TIME FARMS A. PRE-RECESSION B. RECESSION 2. COMMERCIAL FARMERS A. HIGH ROLLERS B. NATURAL DISASTERS c. A + B D. POOR MANAGERS (' Income Per Farm Operator Family by Major Sour~tnd Value of Gross Sales Classes, selected years~0-79 FARMS WITH GROSS SALES $40,000 $20,000 $10,000 $ 5,000 $ 2,500 Less and to to to to Than All Yeara over $39,999 $191999 $ 9,999 $ 41 999 $ 2,500 Farms (dollars) Net Farm Income Before Inventori Adjustmentsb 1960 17,423 8,256 5,206 3,276 1,964 829 2,922 1970 22, 363 10,231 5,747 3,175 1,664 890 4,696 1978C 26,807 10,444 5,282 2,924 1,688 1,678 9,838 Off-Farm Income 1960 2,325 1, 718 1,336 2,206 1,981 2,886 2,268 1970 4,840 3,420 4,242 5,530 6,296 7 ,530 5,975 1978 8,472 8,130 10,936 14,100 16' 776 16 '921 12,480 Total Income 1960 20,067 9,973 6,542 4,982 3,945 3, 715 5,190 1970 27,202 13,651 9,989 8,705 7,960 8,421 10,671 1978 35,279 18,575 16,219 17,024 18,465 18,599 22,317 aAll figures are three year averages around the stated year, except 1960 which is only forl960 and 1961. blncludes government payments, the value of farm products consumed in farm households, and the rental value of farm dwellings. cBased on the 1974 Census of Agriculture definition of a farm. Source: U.S. Department of Agriculture, Economics and Statistics Service, Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1979, Statistical Bulletin No. 650, Washington, D.C., December, 1980, page 112. .,._ r Year a 1940 1950 1960 1970 1978 ~r Per Capita Personal Income of Farm Population and Farm Per Capita Disposable Income as a Percent of Nonfarm Per Capita Income, Selected Years 1940-1979. (' Per Capita Personal Income of Farm Population Farm Sources b Nonfarm Sources (dollars) 180 94 633 275 703 470 1341 1490 3640 3820 c Total 274 908 1173 2831 7460 Farm Per Capita Disposable Income as a Percentage of Nonfarm Per Capita Disposable Income (Percent) 39 60 53 74 95 a All figures are three-year averages around the stated year. bincludes returns from farming operations to resident farm operators for their capital, labor, and management, after deduction of farm production expenses (there is no allowance in the item farm produc-tion expenses for a return on investment in farm capital). Also includes farm wages and other labor income received by hired farm-resident workers. cincludes all income received by farm residents from nonfarm sources such as wages and salaries from nonfarm employment, nonfarm business and professional income, rents from nonfarm real estate, dividends, interest, royalties, unemployment compensation, and Social Security payments. Source: U.S. Department of Agriculture, Economics and Statistics Service, Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1979, Statistical Bulletin No. 650, Washington, D.C., December 1980, page 89. .. • • ·r Year a 1935 1940 1950 1960 1970 1980 . (' Real Level of Price Support, Corn, Soybean, and Wheat; and Real Level of Government Payments to Agriculture, U.S., 1934-1981. b Real Consumer Nominal Price SupEort Government Price Real Price SuEEort Corn Soybean Wheat Paymentsc Indexd Corn Soybean Wheat ($1 bu.) (million $) ($1 bu.) $ .52 $ --e $ --e 436 39.9 $1.30 $ --e $ --e .64 1.05 .75 720 42.6 1.50 2.46 1. 76 1.48 2.21 2.04 252 73.8 2.01 2.99 2.76 1.13 2.00 1. 79 959 88.5 1. 28 2.26 2.02 1.05 2.25 1. 25 3,552 ll5.8 .91 1. 94 1.08 2.25 4.67 2.90 1,531 245.5 .92 1.90 1.18 a Average of three years centered on the stated year. bNational rates at which a loan could be taken from Commodity Credit Corporation. Real Government Payments (million $) 1,093 1,690 341 1,084 3,067 624 cPayments made to farmers for reducing production, disaster (drought, flood, etc.), and production incentives (such as National Wool payment). dl967 = 100. eNo loan rate was established by Commodity Credit Corporation. Sources: Sandra McDonald, USDA, farm income sector, personal communication. Ninety-seventh Congress, 2d Session, Joint Economic Committee, Economic Indicators, Novem-ber 1982, 1982. USDA, Agricultural Statistics, 1934, 1935, 1936, 1939, 1940, 1941, and 1981. (' .. .. • .. (' • ·r USDA, Agricultural Stabilization and Conservation Service, ASCS Commodity Fact Sheet; "1979 Feed Grain Program," "1979 Soybean," and "1979 Wheat," January 1979, March, 1979, and May 1981. USDA, Economic Research Service, Economic Indicators of the Farm Sector: Income and Balance Sheet Statistics, 1980, Statistical Bulletin 674, Washington, D.C.: 1981. USDA, Economic Research Service, Feed Outlook and Situation, FdS-287, November 1982. USDA, Economic Research Service, Wheat Outlook and Situation, WS-262, November 1982. USDC, Bureau of Census, Historical Statistics of the United States, Colonial Times to 1970, U.S. Government Printing Office, Washington, D.C.: 1975. (' ,r' ~ .. • lit 

The Farm Crisis: A Statistical Look at a Perpetual Problem

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The Farm Crisis: A Statistical Look at a Perpetual Problem

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