DALLAS, Texas (RFD-TV) — Farm finances in the Eleventh Federal Reserve District showed a modest improvement in the third quarter of 2025, helped by widespread summer rains that lifted crop yields and supported pasture conditions. Despite stronger production, bankers reported that low commodity prices continue to pressure farm incomes, especially for row-crop operations entering harvest with several years of weak margins and growing carryover debt. Lenders noted that many farmers are having difficulty preparing 2026 budgets as input costs remain elevated and grain futures remain soft, increasing the likelihood of extended credit and a heavier reliance on government assistance.
Credit conditions reflected these stresses. Loan demand declined during the quarter, even as the availability of funds increased and repayment rates moved only slightly lower. Renewals and extensions continued to rise, suggesting that producers are working to bridge income shortfalls with operating credit. Loan volumes fell across most categories except operating loans. Land markets presented a mixed picture: dryland and ranchland values increased, irrigated land slipped, and cash rents rose for irrigated acres but fell for dryland and ranchland. Bankers also anticipated a downward trend in farmland values heading into winter.
Livestock producers remained a bright spot. Record-high cattle prices continued to bolster ranch incomes and improve repayment strength, creating a clear divide between crop-focused and livestock-focused borrowers as year-end approaches.
