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.
The Interior Department is proposing to repeal the Bureau of Land Management’s Public Lands Rule. This move would make huge strides to empower local decision-making and restore balance between conservation and protecting rural livelihoods tied to these public lands.
September 10, 2025 02:45 PM
·
September 10, 2025 10:22 AM
Labor is an ongoing crisis in the ag sector. One industry group outlines three vital reforms to the H-2A visa program that farmers need to secure an affordable, stable workforce.
September 09, 2025 12:22 PM
·
The amendments affect BLM lands in several Western states. Comments on the Sage grouse proposals can be made to the BLM National NEPA Register until Oct. 3.
September 04, 2025 02:16 PM
·
Mike Formica with the National Pork Producers Council joined us on Market Day Report with his reaction to the EPA’s rollback of a Biden-era wastewater discharge mitigation plan.
September 04, 2025 01:41 PM
·
Farmers are struggling with low commodity prices and skyrocketing input costs, resulting in debt that is outpacing income across the sector, according to the USDA’s new farm income forecast.
September 04, 2025 01:05 PM
·
This special program, presented in partnership with Nationwide Agribusiness, premieres on Monday, Sept. 1, at 6 PM ET, only on RFD-TV and RFD-TV Now.
August 27, 2025 04:02 PM
· FarmHER
August 18, 2025 01:39 PM
·
Geomagnetic storms have been occurring with increased frequency in space this year, with significant consequences for agriculture.
