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Can I Repay? Managing Farm Debt Repayment Capacity

Alan Miller, Michael Boehlje and, Craig Dobbins (July, 2000)

Summary

Low prices have some farmers wondering whether they will be able to meet their needs for cash for family living and taxes, debt repayment, and reinvestment. Repayment problems can happen to the best of farmers, because they aren’t always the result of a lack of profitability. Lenders are increasingly asking their farm customers for documentation of repayment or debt servicing capacity. The need to be able to measure and manage repayment capacity seems clear.