By Jamie Martin
Financial conditions across U.S. agriculture remain uneven, with farm lenders reporting continued pressure on profitability and a growing divide between crop and livestock producers.
According to the 2026 agricultural lender survey from the American Bankers Association and Farmer Mac, 75% of respondents said farm profitability had tightened within their local agricultural economies.
Lenders estimated that about 60% of agricultural borrowers will be profitable in 2026, putting the share that may not turn a profit at roughly 40%.
Those expectations are better than lenders anticipated a year earlier, helped in part by projected government payments. However, the survey suggests that financial pressure remains widespread as farmers contend with compressed margins, rising expenses and tighter working capital.
Liquidity remains farmers' biggest financial concern
For the fourth consecutive year, lenders identified liquidity as the leading concern facing agricultural producers.
Working capital has increasingly become a key issue as producers absorb higher operating expenses. Inflationary pressure also increased sharply among lender concerns, with higher energy costs contributing to farm input expenses.
Those pressures are helping drive demand for agricultural credit.
Lenders reported that demand increased during 2026 for both agricultural production loans and loans secured by farmland. They expect demand in both categories to continue increasing over the next 12 months.
That could make cash-flow planning particularly important as producers prepare operating budgets and financing requirements for the 2027 season.
Crop and livestock farms face different conditions
The survey also points to significantly different economic conditions between crop and livestock agriculture.
Lenders reported a pronounced divide in profitability between the sectors, highlighting how the overall condition of the U.S. farm economy can obscure considerably different experiences among individual producers.
Geography is another factor. Conditions varied across the country, with lenders reporting improved profitability for some permanent crop producers in the West.
For farmers, those differences mean national measures of agricultural profitability may tell only part of the story. Commodity prices, input expenses, debt levels, working capital and regional conditions can produce dramatically different financial results from one operation to another.
Farm credit remains relatively healthy
Despite the financial pressures, agricultural lending conditions are not pointing to a widespread credit crisis.
Lenders reported that agricultural loan delinquencies and charge-offs are increasing, and respondents expect credit quality to weaken further during the next 12 months. However, loan performance remains historically healthy.
Approval rates are also strong.
The average approval rate for new agricultural loan applications was 82% in 2026, while lenders anticipate an 88% approval rate for renewal requests during the year ahead.
At lending institutions themselves, deterioration in agricultural loan quality ranked as the top concern, followed by competition among lenders and interest-rate volatility.
Farmland values show resilience
Farmland remains another relatively strong part of the agricultural economy.
Despite broader economic pressures, lenders reported modest increases in farmland values during 2026. Most expect farmland values and cash rental rates to see little or no change during the coming year.
Stable land values can provide an important source of balance-sheet strength for farm businesses, although strong asset values do not necessarily solve short-term cash-flow or working-capital pressures.
The findings demonstrate the increasingly mixed financial picture facing American agriculture heading toward 2027: strong farmland values and generally healthy agricultural loan performance on one side, but tighter liquidity, higher operating expenses and uneven producer profitability on the other.
The annual survey was conducted between July 13 and Aug. 17, 2026, and included responses from more than 600 agricultural lenders representing institutions of different sizes and geographic regions across the United States.
The American Bankers Association and Farmer Mac have conducted the agricultural lender survey annually since 2016 to track lender sentiment, farmland expectations and financial conditions across the farm economy.
Photo Credit: gettyimages-pra-chid
Categories: National