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.
Tyson’s closure reflects deep supply shortages in the U.S. cattle industry, tightening packing capacity, weakening competition, and signaling more volatility ahead for cow-calf producers and feedyards.
November 21, 2025 07:02 PM
·
Gary Hall, co-founder of Hollywood Impact Studios Rehabilitation, joined the program to discuss using agriculture to provide opportunities and mentorship for at-risk youth in Southern California.
November 21, 2025 02:25 PM
·
Crop producers face tightening credit and lower incomes, while strong cattle markets continue to stabilize finances in livestock-heavy regions.
November 21, 2025 11:58 AM
·
Supplemental Disaster Relief Program Stage Two will disburse around $16 billion, approved by Congress last year. Sign-ups begin Monday, and producers have until April to return applications.
November 21, 2025 11:48 AM
·
Row crop losses in 2025 are outpacing last year. With no disaster aid yet approved, many operations face a tough financial bridge to 2026 even as Farm Bill improvements remain a year away.
November 20, 2025 05:00 PM
·
Experts say farmers and ethanol producers would benefit from a risk-based ILUC system that protects forests without relying on speculative modeling.
November 20, 2025 04:24 PM
·
CattleCon 2026 kicks off February 3 in Nashville. Kristin Torres with the National Cattlemen’s Beef Association joined RFD-TV to share more about what’s ahead at this year’s event.
November 20, 2025 01:32 PM
·
Farmland values remain stable, but weakened credit conditions and lower expected farm income signal tighter financial margins heading into 2026.
November 20, 2025 01:04 PM
·
Jerry Cosgrove with American Farmland Trust explains why farmers and ranchers should start their estate planning now.
November 19, 2025 04:44 PM
·
