WABASH, INDIANA (RFD NEWS) — Strong demand for farm loans is supporting agricultural bank earnings, even as financial pressure builds across the crop sector.
According to Kansas City Federal Reserve economist Ty Kreitman, farm loan balances at agricultural banks increased about 7 percent in 2025, helping drive improved profitability and stronger net interest margins. Returns on average assets also rose, reaching their highest levels since 2019.
The increase in lending reflects tighter farm finances. Reduced working capital and higher input costs have pushed more producers to rely on credit, particularly for operating expenses. At the same time, farm debt expanded, with non-real estate loans up about 9 percent and real estate loans rising 6 percent from the previous year.
Despite increased borrowing, financial stress remains relatively contained. Delinquency rates edged higher but stayed low, with just over 1 percent of agricultural loans past due. Strong farmland values, government support, and solid cattle revenues have helped stabilize the sector.
However, the outlook remains uncertain. Profit margins in crop production continue to face pressure from high fertilizer and fuel costs, keeping credit demand elevated moving forward.
Uncertainty in agriculture is shaping decisions in the farmland market as producers weigh geopolitical and financial pressures.
Howard Halderman with the American Society of Farm Managers and Rural Appraisers (ASFMRA) joined us on Wednesday’s Market Day Report to discuss current trends and what farmers and investors are seeing across the Corn Belt.
In his interview with RFD NEWS, Halderman shares insights on farmland values so far this year, highlighting the key local and global factors influencing the market. He also addresses how recent events, including the war in Iran and USDA bridge payments, are affecting buyer activity.
Looking ahead, Halderman provides his expectations for farmland values through the remainder of 2026 and assesses overall market sentiment—whether buyers are feeling confident or cautious. Finally, he identifies who is driving purchases today, from operators to investors and mixed buyers.
