Economists use such terms as "adjustment" and "reallocation of assets," but the American farmer has a simpler, more direct way of describing the state of agriculture in 1985: bad and getting worse.

The U.S. agricultural economy is going through its most wrenching period since the Great Depression and there is little in the market or on Capitol Hill to give hope of an upturn soon. Most experts expect a new rash of farm foreclosures and bankruptcies after the fall harvest.

One of the ironies in this bleak picture is that by most estimates at least half of the nation's 2.4 million farmers have no debt. The problem is centered among middle-sized commercial farmers, who hold a disproportionate share of the debt.

Their solvency is directly linked to the health of Main Street in rural America, where banks, business, farm suppliers and governments rely on farmers for income.

These are some of the dimensions of the problem:

*Prices. Most major commodity and livestock prices are at their lowest levels in several years, with surpluses and more competition in export markets continuing to cast a dark shadow. With a bumper harvest looming to further depress prices, the government predicts that 1985 net farm income could be in the $22 billion-to-$26 billion range, down from last year's $34.6 billion.

*Exports. Overseas trade is agriculture's hole card, with nearly half of U.S. production ticketed for export. But burdensome oversupplies around the world, the strong dollar and sluggish overseas economies indicate more woe on this front. The latest Agriculture Department forecast is that exports will drop to $30 billion, down from 1981's peak of $43 billion.

*Credit. With some sources claiming that as much as half of the nation's $214 billion farm debt may be uncollectable, Congress is under pressure to take an urgent look at remedies. The sense of urgency is heightened by troubles in the independent Farm Credit System, which holds about a third of the debt. Its federal regulator, Donald Wilkinson of the Farm Credit Administration, has said that "multibillions" of federal aid will be needed within the next two years to keep the system intact.

*Land and Implements. Contributing directly to the credit problem is the continuing decline in land and machinery values, a reverse of the inflation of the 1970s that led to massive expansion and new indebtedness. Farmland values dropped another 12 percent in the year before April 1, with some Midwest states experiencing 20 and 25 percent drops on top of earlier deflation. Many experts feel that "bottom" has not been reached. The USDA says that purchases of new and used farm machinery may be off by as much as $1 billion from last year's depressed $7.3 billion.

*Legislation. Cowed by administration insistence that budget limits be met and farm spending restrained, Congress is caught in a web of anguish over a farm bill to replace the law that expires Sept. 30. The challenge is to write a bill that stays within budget, yet which keeps farm income supports as high as possible. Neither chamber has completed action on a bill that still must undergo a difficult conference to reconcile differences. The likelihood of lower price-support levels, and government acquisition of more surpluses, has contributed to market sluggishness.

Prospects are that the final farm bill will bow to the administration's demand that government price supports be set low enough to match prices on the open market, thus making U.S. goods more competitive. Direct income supports for farmers, however, are likely to be kept close to their present mark.

Through each of these categories, one theme keeps emerging as the way out of the woe: better prices. Arnold Wienk, a farmer from Lake Preston, S.D., said it for all farmers last week in brief testimony at a House Agriculture credit subcommittee hearing.

"If there was profit in agriculture the last few years, there would be no need for any of us to be here today," Wienk said. "The bottom line is profit. Rural America would be booming if farmers and ranchers had a profit."