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
Tight fed supplies shift margin risk to packers, strengthening cattle price leverage but increasing volatility.
January 09, 2026 03:36 PM
·
The “Wild, Wild West” of Taxes
January 09, 2026 09:00 AM
·
AFBF Economist Faith Parum provides analysis and perspective on the Farmer Bridge Assistance Program—what commodity growers should know and potential remedies for producers facing crop losses where that aid falls short.
January 08, 2026 02:45 PM
·
Farmer Bridge payments are being used primarily to reduce debt and protect cash flow, not drive new spending. Curt Blades with the Association of Equipment Manufacturers joined us to provide insight into the ag equipment market and the factors influencing sales.
January 08, 2026 08:00 AM
·
North Dakota CO₂ Storage Law Struck Down
January 07, 2026 03:03 PM
·
As the new year begins, both farmers and rural families are taking stock of their finances and planning ahead for 2026.
January 06, 2026 03:23 PM
·
Trade uncertainty—especially regarding soybeans—continues to weigh on future outlooks, even as farm finances and land values remain resilient.
January 06, 2026 03:09 PM
·
Strong export demand supports feed grain prices, but drought risk and seasonal patterns favor disciplined early-year marketing.
January 06, 2026 02:46 PM
·
Strong crush demand and rising ethanol production are pressuring feedstocks, as traders monitor storage risks and supply chain uncertainty and await the upcoming January WASDE report.
January 06, 2026 01:04 PM
·
