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.
Smaller cow numbers and a declining calf crop point to prolonged tight cattle supplies, limiting near-term herd rebuilding potential.
January 30, 2026 03:42 PM
·
Jim Matheson, CEO of the National Rural Electric Cooperative Association, provides new updates on winter storm impacts and the outlook for rural power reliability.
January 30, 2026 02:59 PM
·
Jessi Grote from the AgriSafe Network provides winter safety guidance for rural communities still recovering from the recent winter storm.
January 30, 2026 01:42 PM
·
CattleCon 2026 officially kicks off Tuesday and continues through Thursday, bringing producers together to shape the future of the U.S. cattle industry.
January 30, 2026 01:30 PM
·
The changing political climate in America is leading to a drop in migrant crossings near the U.S.-Mexico border, where ranchers like Dr. Mike Vickers say they witnessed horrors from death to child trafficking.
January 30, 2026 11:47 AM
·
Often overlooked, cotton wholesalers act as stabilizers during market stress, translating fragmented retail demand into workable production programs for mills and manufacturers.
January 30, 2026 08:00 AM
·
January 30, 2026 06:00 AM
·
Todd Janzen with Janzen Schroeder Ag Law explains the updated ag data use agreement model and what it means for farmers and companies alike.
January 29, 2026 01:25 PM
·
UT Extension also offers tips to help consumers stretch their grocery budgets, including meal planning, sticking to a shopping list, and choosing store or generic brands.
January 29, 2026 01:13 PM
·
