WASHINGTON, D.C. (RFD NEWS) — Farm Bill negotiations are advancing in Washington, with agricultural lenders and policymakers focused on improving access to credit and addressing rising production costs.
According to Ed Elfmann, Senior Vice President of Agricultural and Rural Banking with the American Bankers Association, lawmakers are moving closer to a new bill after years of extensions, with potential House action expected soon. However, tight political margins could influence the timeline and final structure.
A key priority is raising Farm Service Agency loan limits to better reflect higher land values and operating costs. Proposals would increase guaranteed ownership loans to $3.5 million and operating loans to $3 million, while also adjusting limits over time using inflation benchmarks.
Lenders are also watching efforts to strengthen beginning farmer programs and modernize access to credit, as well as potential updates to safety net programs such as Price Loss Coverage and Agriculture Risk Coverage to better account for rising input costs.
With margins tightening across agriculture, negotiations are expected to remain fluid as both chambers shape final policy. Meanwhile, the escalating tensions in the Middle East and the ongoing shutdown of the Strait of Hormuz are exerting price pressure on agricultural inputs such as fuel and fertilizer that were already near historic highs.
On Monday morning, fertilizer prices continued their upward climb, with all eight major types now more expensive than at the start of the year — most are up by double digits, with urea up nearly 50 percent, and potash gaining by 6 percent.
Corn growers have been watching those fertilizer costs gain ground for a while now. Economists with the National Corn Growers Association (NCGA) warn that the war with Iran is putting tremendous pressure on those farmers.
“We already had a really interesting year in fertilizer markets leading up to this crisis,” said NGCA Economist Gretchen Kuck. “ You had elevated high prices that we’ve had since 2020. We’re heading into our fourth year of projected net-negative returns for corn growers, which makes it really hard to cover some of those increased, really high production costs, and you’re already having farmers make a lot of really tough decisions. Maybe we’re hoping for prices to come down and hadn’t bought, but you’ve had U.S. tariffs rerouting some supply chains. You’ve had restrictions from China on phosphate. You’ve had countervailing duties on phosphate.”
Ag lawmakers have taken notice of the struggles. Senator Tammy Baldwin (D-WI) recently filed a bill to boost transparency in fertilizer pricing.
“Right now, farmers have very little insight into how prices are determined, and with this legislation, we’re basically going to be lifting the veil back and giving farmers some additional certainty, while also creating some real competition,” Sen. Baldwin explained. “And that’s, of course, another issue here. When there’s no transparency, there’s no sense of competition. The competition lowers costs too, so it’s just another important issue.”
Baldwin says rising fertilizer costs are a bipartisan issue, too, noting support on both sides of the aisle. That bill is now waiting for action from the Senate Ag Committee.
Strong Farm Loan Demand Boosts Bank Earnings
Strong demand for farm loans is supporting agricultural bank earnings, even as financial pressure builds across the crop sector.
According to Kansas City Federal Reserve economist Ty Kreitman, farm loan balances at agricultural banks increased about 7 percent in 2025, helping drive improved profitability and stronger net interest margins. Returns on average assets also rose, reaching their highest levels since 2019.
The increase in lending reflects tighter farm finances. Reduced working capital and higher input costs have pushed more producers to rely on credit, particularly for operating expenses. At the same time, farm debt expanded, with non-real estate loans up about 9 percent and real estate loans rising 6 percent from the previous year.
Despite increased borrowing, financial stress remains relatively contained. Delinquency rates edged higher but stayed low, with just over 1 percent of agricultural loans past due. Strong farmland values, government support, and solid cattle revenues have helped stabilize the sector.
However, the outlook remains uncertain. Profit margins in crop production continue to face pressure from high fertilizer and fuel costs, keeping credit demand elevated moving forward.
Georgia Farm Bankruptcies On The Rise
U.S. farmers are increasingly concerned about long-term profitability and global competitiveness, as rising input costs and weaker margins continue to pressure operations across the country.
A new survey from the Southern Cotton Ginners Association, conducted at the Mid-South Farm & Gin Show, found more than 52 percent of respondents expect to be worse off within two years, while only 9 percent anticipate improvement. Over 75 percent believe U.S. agriculture has lost competitiveness in the past five years, with many pointing to Brazil’s lower costs, fewer regulations, and larger production scale as key advantages.
The Farm Bureau shows Chapter 12 bankruptcies increased for the second year in a row last year, hitting 315 filings. That is an increase of 46 percent from 2024.
Georgia has not been immune to that trend. The Farm Monitor takes us to Athens to see why economists are calling the situation “a tale of two sectors.”
