WASHINGTON, D.C. (RFD-TV) — Farmers could spend more on interest payments this year than ever before as borrowing costs add pressure to farm finances.
American Farm Bureau Federation economist Faith Parum says credit plays an important role in helping farmers cover production costs.
“Farming is obviously a very expensive industry, so it takes a lot of money to put a crop in the ground, and it takes a while for farmers to get that money back and sell it in the marketplace. Farm credit is one of the ways that they get around that. Taking out loans and things to make sure that they have the capital needed to put that crop in the ground and wait, some places years to get that money back.”
Parum says the amount of debt producers take on can also offer clues about broader financial conditions across farm country.
“Using credit doesn’t mean necessarily that the farm or the farm economy is in bad financial health, but something we do look at is the amount of debt farms are taking on. USDA actually says that this is the highest interest rate expenses in 2026 dollars that they’ve ever estimated. Taking on debt is not a bad thing, but we want to make sure it’s in a sustainable manner.”
As producers face higher borrowing costs, the Farm Bureau is calling on Congress to pass the farm bill, saying current provisions could make borrowing easier for farmers and ranchers.
