HIAWATHA, IOWA (RFD NEWS) —The Farm Credit System remains financially sound, but credit risk is rising as tougher farm and economic conditions pressure some producers. The Farm Credit Administration (FCA) board received the update at its June 11 meeting (PDF Version).
The FCA reported stable earnings and stronger capital for the quarter ending March 31. Total capital reached $86.4 billion, up 7.3 percent from a year earlier.
Loan quality remains solid overall, but stress indicators increased. Nonperforming assets rose to 1.09 percent of loans outstanding and other property owned, compared with 0.96 percent a year earlier.
The broader farm economy remains mixed. FCA says the Middle East conflict is driving energy volatility and inflation pressure, while consumer spending weakens and loan delinquencies rise. Net farm income is expected to decline in 2026, though federal support keeps it above average.
Crop returns may improve modestly, while livestock returns remain strong despite drought concerns. Farmland values have stabilized, but softer cash rents and regional drought remain risks.
Many farmers are working to navigate today’s ag economy as thin margins, high input costs, and market uncertainty continue to create financial hurdles across rural America. Joe Peiffer with Ag & Business Legal Strategies (ABLS) joined us on Monday’s Market Day Report to provide an update on Chapter 12 bankruptcies and how current trends compare to previous years.
In his interview with RFD News, Peiffer discussed what he is seeing so far in 2026 when it comes to Chapter 12 bankruptcy filings. He also compared current filing activity to last year’s levels and how the trend is shaping up.
Peiffer goes on to address the factors contributing to the current trend, including ongoing financial pressures in the farm economy. He also discussed his outlook for the remainder of the year based on current conditions and market factors.
Finally, Peiffer offered advice for farmers as they continue to navigate financial challenges in today’s farm economy.
