Declining net farm income and softening land values are raising concerns about the agricultural sectors’ financial performance and position. Articles in this series highlight the state of farm income and wealth, farm structure and lender consolidation, and traditional and alternative leverage measures with distributional insights.

Net farm income is expected to fall sharply from 2013 to 2016, after rising during the 2009-2013 time period. This decline would weigh on farm sector financial indicators. However, sector financial indicators are expected to remain at historically favorable levels, despite weakening relative to 2009-2013.

Both large and small farms have increased their shares of farm numbers, although they account for vastly different shares of production, assets, and debt. Banks and Farm Credit System institutions are fewer and larger. These changes have implications for the major Federal farm credit provider, USDA’s Farm Service Agency.

Record high levels of farm income at the beginning of the decade has shifted to an environment of extremely tight margins in 2016. Debt-to-asset ratios are commonly used to measure farm financial stress. An alternative measure based on the Moody's Investor Service approach provide is an earlier signal of current financial situations.