Farm liquidity across Iowa has been declining over the past several years. An Iowa State University study of over 200 mid-size Iowa farms found that 44 percent of those operations could be classified as having vulnerable liquidity in 2018. That figure was just 31 percent in 2014. ISU Extension Economist Alejandro Plastina says several factors have led to that decline and the loss of working capital, including the trade war with China and weather.
He says the cumulative loss of working capital on Iowa farms and ranches over a three-year period since 2014 is also down $189 per acre.
Without government assistance in 2018, including $646 million of MFP payments, Plastina says the economic conditions on Iowa farms would have been worse.
Plastina is expecting the numbers for 2019 to be poor as well. He’s advising producers to secure their operating loans for the next year or two and to do what they can to protect their working capital.
