NASHVILLE, Tenn. (RFD-TV) — A new tax exemption for farmland real estate loans is beginning to reduce borrowing costs for farmers, even as lenders await formal guidance on how to apply the law. The Access to Credit for our Rural Economy Act (PDF Version) — also known as ACRE, which is included in the One Big Beautiful Bill Act (OBBBA) — took effect immediately on July 4 and gives banks a 25 percent tax exemption on interest earned from newly originated farmland loans.
While far smaller than the 100-percent exemption proposed initially, it still helps producers facing squeezed margins from high input costs and softer grain markets.
The law is expected to be especially helpful for farmers seeking to purchase land they currently rent or expand existing acreage. Bankers say even a quarter-point rate reduction can meaningfully improve cash flow for beginning farmers. But most institutions are moving cautiously while waiting for Treasury and IRS guidance clarifying technical gray areas, including how to handle the partial exemption, whether certain refinancings qualify, and how chattel or equipment loans might be treated when bundled into real estate deals.
Despite its limitations, the ACRE Act improves commercial banks’ competitiveness against the Farm Credit System, which receives a full interest-income exemption.
ABA estimates the law could save producers roughly $100 per acre annually over the next 30 years — far more than recent one-time emergency payments. Bankers also view the legislation as a significant policy foothold that builds momentum for future expansions, especially if Congress revisits broader tax legislation in the coming years.
Farm-Level Takeaway: The ACRE Act modestly reduces farmland borrowing costs now, with more savings possible once federal guidance clarifies which loans qualify.
Tony St. James, RFD-TV Markets Specialist
The WASDE/Crop Production combo will be the first full read on supply, demand, and yield that could move basis and hedging plans since the government shutdown more than a month ago.
November 03, 2025 09:34 AM
·
China’s grain expansion model may be hitting its limit. Lower prices, high rents, and policy fatigue threaten future output — with ripple effects across global feed and oilseed markets.
November 02, 2025 05:06 AM
·
U.S. Rep. Dusty Johnson (R-SD) shares his outlook on the developing U.S.-China Trade agreement, and the ongoing impact of the federal government shutdown—now stretching past four weeks—on rural communities and producers.
October 31, 2025 01:35 PM
·
October 31, 2025 01:30 PM
October 31, 2025 01:25 PM
The Livestock Conservancy joins us in the RFD-TV Studio to discuss how protecting heritage-breed poultry is essential to resilient food systems and the preservation of agricultural traditions.
October 31, 2025 12:59 PM
·
Texas A&M livestock economist Dr. David Anderson joins Tony St. James to discuss the geopolitical tensions and U.S.-Mexico border closure that are leading to sharp swings in the cattle market.
October 31, 2025 12:50 PM
·
Arizona producers are proving that desert farming and water conservation can coexist through technology, reuse, and efficiency — reinforcing both food security and environmental stewardship.
October 31, 2025 12:39 PM
·
Rabobank’s outlook signals a tightening margin environment, emphasizing the need for cost control, trade stability, and clearer policy signals heading into 2026.
October 31, 2025 11:44 AM
·
