Lenders reported continued pressure on farm profitability in 2026, with 75% of respondents saying profitability had tightened in their local agricultural economies, according to the annual survey by the American Bankers Association and Farmer Mac.
Projected record government payments have helped offset compressed margins, according to survey responses. Still, lenders estimated that 40% of borrowers would not be profitable this year — an estimate that varied widely by region and sector concentration. Diverging profitability between the livestock and crop sectors in 2026 resulted in markedly different lender perspectives in this year’s survey.
“Agricultural lenders are navigating a delicate balance: credit demand is rising just as market volatility, funding costs, and competitive pressures are intensifying,” said Jackson Takach, chief economist and head of Farmer & Ranch at Farmer Mac. “The institutions best positioned for the year ahead will be those that combine disciplined risk management with technology, secondary-market tools, and the strong borrower relationships that have long defined agricultural lending.”
The survey, released today at ABA’s Agricultural Bankers Conference in Minneapolis, found that agricultural loan performance remained generally strong in 2026 despite continued financial pressure across much of the farm economy. However, lenders reported that tighter margins and elevated input costs have led to higher credit demand, even among producers benefiting from stronger commodity markets.
“Agricultural borrowers are seeing better farm profitability than they expected a year ago, with support from government payments, but that doesn’t mean financial stress has disappeared,” said Ryan Lee, ABA’s research and economic policy manager. “Working capital remains under pressure, loan demand is rising and lenders continue to watch credit quality closely. The survey reflects both the resilience of farm borrowers and the challenges many producers still face heading into 2027.”
Key findings from the 2026 survey include:
- Government payments boosted the profitability environment, but pressure remains. Lenders estimate that 60% of agricultural borrowers will be profitable in 2026, exceeding expectations from a year ago. Projected record government payments have helped support that outlook, even as margins remain compressed.
- Liquidity remains the most persistent concern for producers. For the fourth consecutive year, lenders ranked liquidity as the top concern facing their producers, underscoring the continued importance of working capital. Inflationary pressure rose more sharply than any other concern as higher energy prices increased input costs.
- Credit quality again ranked as lenders’ leading concern. Agricultural loan deterioration ranked first among concerns facing lending institutions, followed by lender competition and interest rate volatility.
- Crop and livestock producers continue to face sharply different conditions. Lenders reported a pronounced divide in profitability between the two sectors. Conditions also vary by region, including improved profitability for some permanent crops in the West.
- Delinquencies continued to rise but remain historically healthy. Respondents reported rising agricultural loan delinquencies and charge-offs and expect credit quality to weaken further over the next 12 months. Even so, credit standards remain relatively stable, with fewer lenders planning to tighten underwriting standards or loan terms.
- Higher operating costs are increasing demand for credit. Demand rose in 2026 for both agricultural production loans and loans secured by farmland. Lenders expect demand in both categories to increase further over the next 12 months.
- Farmland values remain resilient. Lenders reported modest increases in farmland values during 2026 despite economic headwinds. Most expect little to no change in farmland values or cash rents over the coming year.
- Approval rates remain strong. Lenders reported an average approval rate of 82% for new agricultural loan applications in 2026. They expect an 88% approval rate for renewal requests over the next year.
