NASHVILLE, Tenn. (RFD-TV) — Farm debt at agricultural banks continued to rise in the second quarter of 2025, driven by tighter margins for crop producers and steady demand for financing, according to the Federal Reserve Bank of Kansas City.
While loan delinquency rates remain low at just 1.3 percent, they ticked slightly higher as farm financial conditions weakened. Agricultural banks—defined as those with at least a quarter of lending tied to farm loans—reported stronger growth than other lenders, with half seeing loan balances increase by more than 5 percent and a quarter posting gains over 10 percent.
Real estate debt at farm-focused banks rose 5 percent year-over-year, while production loans increased nearly 10 percent. By contrast, non-agricultural banks showed flat to declining farm loan balances. Record farm debt levels are being offset by relatively strong earnings at agricultural banks, supported by higher interest margins; however, liquidity has tightened as loan-to-deposit ratios have crept upward.
The Fed notes that conditions remain uneven across the agricultural sector. Livestock producers, particularly cattle operators, are experiencing more substantial returns, while crop producers are facing low commodity prices and high input costs. Government relief payments and firm land values have provided some cushion, but weaker profitability is likely to keep credit demand elevated into 2026.
Farm-Level Takeaway: Farm debt is climbing to record levels at ag banks, reflecting pressure on crop producers’ finances even as livestock and land values lend stability to the sector.
Tim and Sharyn Abbott of the Music City Celebration Sale preview the weekend’s premier auction, drawing breeders to Nashville again this year.
December 12, 2025 04:27 PM
·
Western Caucus member Rep. Bruce Westerman (R-AR) details the SPEED Act on Champions of Rural America. The legislation aims to reform NEPA, streamline permitting, and expand domestic energy development.
December 12, 2025 03:58 PM
·
Plan for sharp, short-term volatility after unexpected outages; permanent closures rarely trigger major price spread disruptions.
December 12, 2025 12:25 PM
·
The specific provision in the CO₂ storage law allowed the North Dakota Industrial Commission (NDIC) to authorize carbon storage projects to proceed even if they lacked unanimous consent from all affected landowners.
December 11, 2025 04:15 PM
·
American Farm Bureau Federation (AFBF) economist Danny Munch joined us on Thursday’s Market Day Report to break down the scope of the U.S. Christmas Tree industry and what growers are up against.
December 11, 2025 01:53 PM
·
December 11, 2025 10:49 AM
Outdated reporting thresholds reduce cash-market visibility and increase the urgency of comprehensive Mandatory Price Reporting reform.
December 10, 2025 07:00 PM
·
Ag Secretary Brooke Rollins signed six MAHA waivers for SNAP in Hawaii, Missouri, North Dakota, South Carolina, Virginia and Tennessee.
December 10, 2025 02:25 PM
·
American Soybean Association President Caleb Ragland shares the soybean sector outlook following the announcement of farm aid to offset losses for U.S. row crop growers.
December 10, 2025 11:33 AM
·
