Annual aggregate (sector) financial statements for Nebraska's farming sector were compiled for the 1960-80 period. An existing econometric model was updated to reflect sector financial relationships for the 1960-79 period. It was used to project sector financial statements for 1981-83 under alternate sets of assumptions using financial statement entries for 1980 as initial values. Comparisons of 1975 and 1980 sector financial statements with those projected for 1982 and 1983 provided numerous measures of the deteriorating financial position of the farming sector. Debt increases 1975-80 resulted in a declining sector equity ratio despite large increases in the current dollar value of assets during the period. Equity ratios were projected to decline further in 1982 and 1983 as financial assets were depleted and real estate values declined. Sector net income from farming was projected to continue its 1975-80 decline and be negative in 1982 and 1983. Debt extensions were an increasingly important source of sector liquidity 1975-80 and that trend was projected to continue in 1982-83. Financial stresses in the farming sector were expected to result in rapid modification of management approaches and actual revenue shortfalls and debt levels for 1982 and 1983 are expected to be less than those projected, but undoubtedly will be highly unfavorable. Major insights drawn from the 21-year sequence of sector financial statements included : (1) Equity liquidation through increased borrowing became a major source of sector liquidity during the period. (2) Financial flows through the sector increased greatly during the period of 21 years, but the purchasing power of sector net income was less at the end of the period than it had been during the early 1960's. (3) The ratio of debt repayments to net farm income was stable during the 1970's and increased three-fold during the 1980's as the sector's debt load increased and debt rollovers became more prevalent. (4) Proprietors' withdrawals for family living, taxes, and nonfarm investments exceeded sector net income in more than one half of the years and the resulting net disinvestment in the farming sector totaled to an estimated $2.9 billion in the 21 years.