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.
In the meantime, Senate Majority Leader John Thune is asking that farmers be allowed to use marketing assistance loans to help stay afloat.
October 21, 2025 11:57 AM
·
Beef industry groups seem to agree — market-based pricing, not federal intervention, best supports rancher livelihoods and long-term beef supply stability.
October 21, 2025 11:22 AM
·
Cattle groups say additional imports would offer little relief for consumers but could erode rancher confidence as the industry begins to rebuild herds.
October 21, 2025 11:06 AM
·
Expect firm calf and fed-cattle prices — pair selective heifer retention with prudent hedging and liquidity to bridge rebuilding costs.
October 17, 2025 04:54 PM
·
NEFB President Mark McHargue provides an update from the Husker State, where farmers are working hard to bring in one of the largest harvests in recent years.
October 17, 2025 04:06 PM
·
Todd Miller, CEO of Head Honchos, shares about his business offering to ease agricultural labor shortages.
October 17, 2025 04:02 PM
·
National Farmers Union (NFU) President Rob Larew discusses the urgent need for aid as farm families face mounting input costs and long-term market uncertainty.
October 17, 2025 01:08 PM
·
The new antitrust agreement between the Department of Justice (DOJ) and the U.S. Department of Agriculture (USDA) aims to enforce antitrust laws and monitor market activity across the ag sector.
October 17, 2025 12:27 PM
·
Large carryover stocks continue to put pressure on commodity prices, creating uncertainty for growers looking to market their grain.
October 16, 2025 04:20 PM
·
