Agricultural lenders report signs of tighter conditions in farm profitability and credit quality in 2025, according to a joint survey conducted by the American Bankers Association and the Federal Agricultural Mortgage Corporation, or Farmer Mac.
Most lenders expect producers to remain profitable this year, but fewer than half are projected to stay in the black in 2026 — the lowest share since 2020, according to the survey report, released today at the ABA Agricultural Bankers Conference in St. Louis. Lenders are most concerned about grain and cotton farms, with nearly 70% saying they’re very worried about grain profitability — up sharply from just 15% two years ago. By contrast, lenders express much less concern about livestock operations, particularly beef and poultry, which continue to benefit from strong demand and high prices.
Despite tighter credit standards, agricultural lenders continue to meet producers’ financing needs — approving roughly 84% of loan applications over the past year and expecting to renew nearly 88% of existing loans in the year ahead, the survey found.
Key findings from the 2025 survey include:
- Only 52% of borrowers are expected to remain profitable in 2025, with that number projected to dip below 50% in 2026 — the lowest level since 2020. In addition, nearly 93% of lenders expect farm debt to increase over the next year, reflecting tighter working capital and increased reliance on credit.
- Farm income and working capital remain the top concerns for lenders, followed closely by inflationary pressures.
- Credit quality and agricultural loan deterioration ranked as the top overall concern for lending institutions in 2025, followed by lender competition and interest rate volatility.
- While delinquency and charge-off rates remained relatively stable, lenders reported signs of deterioration and expect further declines in credit quality over the next 12 months.
- Demand for loans secured by farmland and agricultural production loans increased in 2025, with expectations for further growth in 2026.
- Farmland value growth slowed in 2025, and lenders anticipate a modest decline in national average cropland values over the next year.
- With liquidity and credit risk topping lenders’ concerns for 2025, secondary market programs have become even more vital. Facing tighter margins and higher rates, lenders continue to rely on Farmer Mac to manage balance sheet risk and maintain funding capacity. This year, 77% reported using Farmer Mac for agricultural real estate and USDA-guaranteed loans, up from 67% in 2024—reflecting Farmer Mac’s fundamental role in sustaining credit access across the agricultural economy.
Lenders also reported continued investment in technology to streamline underwriting and loan servicing. More than half of respondents indicated their institutions implemented digitization efforts in 2025, with a focus on improving credit decisions and loan applications.
The survey highlighted demographic shifts in agriculture, with lenders reporting an uptick in farm retirements and rising family living costs. More than 75% of lenders expect retirements to accelerate in the next 12 months.
