NASHVILLE, TENN. (RFD NEWS) — Farm operating debt remains mostly stable across the South, but late-loan categories are showing pressure after a difficult year for row-crop margins. Charley Martinez with the University of Tennessee Institute of Agriculture says non-real estate farm loans were 4 percent higher in the fourth quarter of 2025 than a year earlier.
The biggest concern is loan quality. Martinez says non-accrual loans stayed elevated from the previous quarter and were 172 percent higher than in the fourth quarter of 2024. Loans 90 days or more past due were nearly unchanged from a year earlier.
Loans 30 to 89 days late fell from their first-quarter peak, but Martinez says some of that debt likely moved into the non-accrual category by year-end. That category still remained 35 percent higher than fourth-quarter 2024.
State pressure varied. Alabama, Georgia, Louisiana, Mississippi, and Arkansas were above the regional average for total late debt as a share of total loan volume.
Higher crop prices and future ARC and PLC payments may help, but input costs, interest rates, and tight margins keep working capital important.
Farm-Level Takeaway: Operating debt remains manageable in many areas, but rising non-accrual loans show why careful cash-flow management matters in 2026.
Tony St. James, RFD News Markets Specialist
Cash flow management and lender communication are becoming critical survival tools for farmers as tightening margins increase risk and borrowing pressure.
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