The two graphs that follow are aggregated data from the United State Department of Agriculture (USDA). The data depicts the overall fundamental strength of the agricultural sector.
The agricultural sector is consistently profitable, as seen on this graph from the USDA Long-term Projection, February 2007. The aggregated U.S. figures are profitable and growing.
As previously discussed, the debt structure of farms nationwide rose and peaked in the mid 1980’s as a result of rising land values and equity lending of the agricultural lending industry. Since the mid 1980’s, however, agricultural lenders have lent responsibly, real estate values have increased, and the overall proportional leveraged position of farmers nationwide has gone down.
Currently, the agricultural industry’s debt to asset ratio is approximately 11% currently. Meaning that for every dollar of assets, farmers owe 11 cents. This low debt structure is another contributing factor to the fundamental strength of the agricultural sector.