I have way too busy of day to think about this too long, but this topic has been on my mind a lot. I keep thinking history "kind of" repeats itself, but is never quite the same.

I can see some nuances. In the 1980's, grain production had a huge backstop in the government program. More or less, it was set just at or slightly below the cost of production (maybe by design, maybe by happenstance). A producer couldn't really get too badly burned on production cost. The grain producer had fairly modest production costs (there was a post yesterday about $10-$10-$10 seed, chem, fert), and a farm program that only let you fail if you let your other costs (land & interest) get out of hand.

This time, production costs are huge by comparison. And although there are several safety nets, ARC/PLC payments, crop insurance, and a very low LDP/loan price, they are all effectively just a few inches off the concrete. Even a well capitalized, low leverage producer is going to get toasted this year. Out of pocket production costs are substantially higher that the value of the crop, and even if the farm is paid for, cash and working capital are going to evaporate so quickly.

Family living costs are also so much higher. Health care, college tuition, groceries, senior care, cars...... I had a banker share some numbers on a 400 acre, operating and land debt free farm that he his familiar with.  Already in 2014, the out-of-pocket cost for the crop exceeded the value of the harvested grain.    With no land expense!    Now there were some weather factors that shortened the crop  (if you are a landlord, you don't have to pretend this happens as corn in Iowa always yields +200 bu, hehehehe).      But by the time the family got fed last year, this operation lost equity and had to borrow a bit of crop input debt to make 2015 happen.     

Now in 2015, rinse and repeat.    The crop price is so low, they are going to get no return for their land again, and still have to keep a roof over the family!    Family living costs sent them back to the bank.

FWIW, this operation also has a small custom hog finishing operation, which offsets some fertilizer expenses, but the modest building payments for the next 7 years, kind of make this a bunch of work with no addition to positive cash flow.

I'm still trying to wrap my head around how a small, almost "all equity" operation had to start borrowing, but I can see where this could become wide spread.  Quickly.