WASHINGTON, D.C. (RFD-TV) — Farm Credit Administration board members reviewed a quarterly update (PDF Version) indicating that U.S. agriculture is entering 2026 with mixed economic signals: low crop margins persist, while livestock profitability remains strong. The briefing also found the Farm Credit System financially sound, though credit stress is slowly increasing in select sectors.
The broader economy ended 2025 relatively stable, with GDP growth just above 2 percent and unemployment rising to 4.4 percent. Inflation eased but remains above the Federal Reserve’s target, even after three modest rate cuts. Elevated input costs, especially in services and manufacturing, continue to pressure margins.
In agriculture, bumper crops and weak commodity prices are squeezing grain and soybean producers, compounded by fertilizer costs and storage challenges. Livestock producers, by contrast, are benefiting from strong prices and favorable feed costs. The newly announced $12 billion in federal tariff-related assistance is expected to provide short-term relief, though most farm-bill payments will not arrive until late 2026.
The Farm Credit System reported $6.0 billion in year-to-date earnings through September, with capital rising to $84.3 billion. While loan quality remains solid overall, nonperforming assets edged higher, reflecting early stress among some borrowers.
Farm-Level Takeaway: Strong Farm Credit finances help cushion producers, but prolonged low crop margins could strain renewals in 2026.
Tony St. James, RFD-TV Markets Specialist
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