KANSAS CITY, Mo. (RFD-TV) — Farm credit conditions tightened again in the third quarter as weaker crop margins eroded working capital across much of the Midwest and Plains, according to the Kansas City Federal Reserve’s Ag Credit Survey. The KC Fed reported continued declines in farm income and loan repayment rates, alongside rising renewal activity that signals growing financial strain for many operations.
Non-real estate loan demand increased steadily, driven by higher operating needs and tighter liquidity among crop farms. The KC, Chicago, and Minneapolis districts reported the strongest upticks in financing needs, while fund availability slipped modestly in several regions as lenders became more cautious.
Capital spending fell at the fastest rate since early 2020, underscoring tighter budgets, though household spending stabilized after years of growth. These shifts reflect limited profit opportunities for crop producers, despite some recent price improvements.
Regionally, farmland real estate values provided a key stabilizing force. Non-irrigated cropland values held firm or increased in more than half of the surveyed states, with Oklahoma and Texas showing the strongest gains.
Looking ahead, the KC Fed notes that financial stress remains contained overall, supported by firm land values and earlier relief funding — but highly leveraged crop farms face the greatest pressure as credit conditions continue to tighten.
Farm-Level Takeaway: Working capital is tightening for crop farms, increasing reliance on operating loans even as land values steady in the broader sector.
Tony St. James, RFD-TV Markets Specialist
Higher ocean freight raises export costs just as global grain competition intensifies.
December 04, 2025 02:50 PM
·
Farm CPA Paul Neiffer has developed a detailed calculator to help producers navigate the program’s requirements. He joined us on Thursday’s Market Day Report to explain how it works.
December 04, 2025 01:20 PM
·
Improved export prospects and higher crop prices strengthened future expectations despite continued caution about spending.
December 03, 2025 01:52 PM
·
Strong demand supports sweet potatoes, but grading challenges and rising costs weigh on returns for Southeastern growers.
December 02, 2025 06:17 AM
·
Despite the need for swift action, many ag lawmakers and industry groups argue that farm aid alone will likely not be sufficient to help farmers without improved trade relations with China.
December 01, 2025 12:21 PM
·
Fair market value shapes taxes, transitions, lending, and sales, making accurate valuation essential for long-term planning.
December 01, 2025 11:21 AM
·
SDRP Stage 2 now helps producers recover shallow, uninsured losses from major 2023–2024 disasters, with streamlined sign-ups open through April 30.
December 01, 2025 11:16 AM
·
November 26, 2025 01:43 PM
Low farmer shares reflect deep consolidation across the food chain, keeping producer returns thin even as retail food prices remain high.
November 25, 2025 03:02 PM
·
