Financial stress in the U.S. farm economy is becoming harder to ignore. Farmers are still paying elevated production and borrowing costs, while the prices they receive for key crops remain depressed—an increasingly painful squeeze as the year heads toward winter.
A Chicago Federal Reserve survey released last month showed weaker repayment performance for non-real-estate farm loans across the Midwest. Third-quarter repayment rates were lower than a year earlier for the eighth straight quarter. Lenders also reported tightening standards: 21% said collateral requirements rose in the third quarter, and none said those requirements eased.
Looking ahead, lenders are bracing for more pressure on farm income. A striking 92% expect net cash earnings for crop farmers—including government payments—to be lower in the fall and winter than they were a year ago. Nearly half of the bankers surveyed anticipate an increase in forced sales or liquidations of farm assets by financially distressed farmers within the next three to six months.
Industry groups are also warning that the downturn is not a one-off. Earlier this month, the American Soybean Association (ASA) projected that 2025 will likely bring a third consecutive year of losses. The group noted that when harvest began in September, November soybean futures were 25% to 30% lower than they were in 2022.
At the same time, costs have refused to come down. Farm production expenses are expected to rise by $12 billion from last year, reaching $467.4 billion in 2025. With expenses projected to stay elevated into next year, 2026 is shaping up to look uncomfortably similar.
“Unless revenues increase significantly next year, this would squeeze farmgate profits for a fourth year, marking the longest stretch of substantial soybean production losses since [USDA’s Economic Research Service] 1998-2002 reporting period,” the ASA warned.
The sources of higher costs are coming from multiple directions. President Donald Trump’s tariffs have made some key imports more expensive. Russia’s war in Ukraine pushed fertilizer prices higher. And the Federal Reserve’s earlier interest-rate hikes raised borrowing costs—making it more expensive to carry debt and finance operations.
Demand pressures have added another layer. Trump’s trade war sharply curtailed Chinese orders of U.S. soybeans for a long stretch, only beginning to thaw recently.
Other indicators are flashing red too. Separate data show U.S. farm bankruptcies have surged this year, and the National Corn Growers Association warned over the summer about “the economic crisis hitting rural America.”
The Trump administration has proposed a $12 billion rescue package meant to function as a temporary “bridge” until more aid arrives next year. But many farmers argue the short-term assistance still won’t come close to covering the scale of losses.
Shawn Arita, associate director of the Agricultural Risk Policy Center at North Dakota State University, told Reuters that losses this year for nine major commodity crops are expected to total between $35 billion and $44 billion. Caleb Ragland, president of the ASA and a soybean farmer, said the aid package might cover only around one-quarter of soybean losses.
“We’re appreciative of an economic bridge,” Ragland told Reuters, but said the funds amount to “plugging holes and slowing the bleeding.”
