Economists at the Kansas City Fed say that weaker crop prices over the past year have reduced farm income. That has led to lower loan repayment rates and more renewals and extensions. Last year, farm banks issued more than $115 billion in agricultural loans.
Meanwhile, farm bankruptcies are also on the rise. A University of Arkansas study shows more U.S. farms filed in the first three months of 2025 than in all of 2024.
Extension economist Ryan Loy says the 259 filings signal financial stress, similar to that seen in 2018 and 2019. He points to low commodity prices and higher costs for seed, fertilizer, and diesel.
Related Stories
Purdue University Professor of Agricultural Economics Dr. Jim Mintert shares a closer look at farmer sentiment and the key issues shaping the agricultural economy in January.
Shrinking slaughter capacity may delay heifer retention, complicating herd rebuilding plans.
Securing Critical Water Resources for South Texas Agriculture
Even small declines in the calf crop translate into sustained supply pressure, supporting cattle prices over multiple years.
Economists are also closely watching how policy decisions in Washington could influence markets moving forward. Analysts say deferred futures for corn, soybeans, and wheat suggest markets are operating near break-even levels, not at prices that would encourage expanded production.
Falling livestock prices, combined with higher input costs, continue to squeeze farm profitability heading into 2026.
