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.
Fair market value shapes taxes, transitions, lending, and sales, making accurate valuation essential for long-term planning.
December 01, 2025 11:21 AM
·
SDRP Stage 2 now helps producers recover shallow, uninsured losses from major 2023–2024 disasters, with streamlined sign-ups open through April 30.
December 01, 2025 11:16 AM
·
Strong yields and higher cattle prices helped stabilize conditions, but weak crop prices and rising carryover debt remain major challenges for Eleventh District farmers.
November 25, 2025 02:55 PM
·
Jake Charleston, with Specialty Risk Insurance, joins us now for an industry update and advice for cattle producers as they consider options for managing the risks of a murky market.
November 25, 2025 01:26 PM
·
Tyson’s Nebraska plant closure and falling Cattle on Feed numbers send cattle markets tumbling. Analysts warn of tighter supplies, weak margins, and rising global competition.
November 25, 2025 12:05 PM
·
Farmers with unpaid Hansen-Mueller grain should verify delivery records immediately and file indemnity claims quickly, as coverage rules differ sharply by state.
November 24, 2025 02:32 PM
·
Farm legal expert Roger McEowen reviews the history of the Waters of the United States (WOTUS) rule and outlines how shifting definitions across multiple administrations have created regulatory confusion for landowners.
November 24, 2025 12:38 PM
·
The U.S. Department of Labor (DOL) estimates that the move will save farmers and ranchers $2.5 billion each year. The group warns that new methods for calculating the adverse-effect wage rate would result in lower pay for foreign workers.
November 24, 2025 11:32 AM
·
These “USDA Foods” are provided to USDA’s Food and Nutrition Service (FNS) nutrition assistance programs, including food banks that operate The Emergency Food Assistance Program (TEFAP), and are a vital component of the nation’s food safety net.
November 24, 2025 10:09 AM
·
