Farm Debt Climbs as Sector Solvency Weakens Further

USDA projects farm debt will grow faster than assets and equity this year

WASHINGTON, D.C. (RFD News) — U.S. farm sector debt is forecast to reach a record $605.1 billion in 2026, rising faster than assets and equity and adding another sign of financial pressure across agriculture.

USDA projects total debt will increase by $26.4 billion, or 4.6%, from 2025. Real estate debt is forecast at $399 billion, up 4.6%, while non-real-estate debt rises 4.4% to $206.1 billion.

Farm assets are expected to increase 3% to $4.47 trillion, largely because of higher farm real estate values. Sector equity rises 2.7% nominally to $3.86 trillion but slips slightly after inflation.

Because debt is growing faster than assets, USDA expects farm-sector solvency to worsen. The debt-to-asset ratio increases from 13.34% in 2025 to 13.54% this year, while inflation-adjusted debt rises 1.5%.

Working capital is forecast to improve 3.5% after falling 15% last year, providing some liquidity relief. Other debt-service measures, however, indicate continued pressure as producers carry increasingly expensive obligations.

Farm-Level Takeaway: Rising farm debt and weaker solvency leave producers more exposed to high interest costs, tighter margins and future income shocks.
Tony St. James, RFD News Markets Specialist

Tony St. James joined the RFD-TV talent team in August 2024, bringing a wealth of experience and a fresh perspective to RFD-TV and Rural Radio Channel 147 Sirius XM. In addition to his role as Market Specialist (collaborating with Scott “The Cow Guy” Shellady to provide radio and TV audiences with the latest updates on ag commodity markets), he hosts “Rural America Live” and serves as talent for trade shows.

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