Source: FARM DOC DAILY, UNIV. OF ILLINOIS, 5/25/18


In a series of recent articles, we show that farmers' use of implement dealer financing has increased substantially since 2003. Implement dealers currently provide nearly one-third of the agricultural sector's long-term non-real estate debt. We also found that implement dealer financing is more common for smaller farms. Some industry observers have expressed concern that implement dealer financing may lead to increases in financial risk for participating farms. This post compares the financial risks between farmers with and without implement dealer financing for long-term non-real estate debt (i.e., machinery and equipment loans). We find that farms that use implement dealer financing have similar indicators of potential financial stress than those that do not.

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