Farms in this group show adequate to excellent liquidity and acceptable solvency. Expansion may be feasible. Farms in this group will not likely fail. However they may experience moderate cash flow problems or capital replacement may be less than levels required to remain in business long term. Farms in this group can survive if operating changes and asset or debt restructuring occurs.
Farms are vulnerable to income losses or asset value declines.
Note this group contains farms with large losses and high equity as well as those with positive earnings and low equity. Severely stressed . Survival of the farm is unlikely. There are some significant difference from the 1980s. Farmers, lenders, and public officials understand farm financial stress much better and have more programs and tools with which to work However, for a farm family, unable to pay its bills or service debt because of reduced incomes, the situation is very similar to the 1980s.