MINNEAPOLIS, MN – Four in ten agricultural borrowers may finish 2026 without a profit as higher operating costs, tighter liquidity and sharply different conditions between crop and livestock producers reshape the farm credit outlook.
The American Bankers Association and Farmer Mac say 75 percent of agricultural lenders reported tighter profitability in their local farm economies. Lenders estimate 60 percent of borrowers will remain profitable this year, helped in part by projected record government payments.
Liquidity remains the top producer concern for the fourth consecutive year, while inflationary pressure rose sharply as higher energy costs increased farm expenses.
Lenders also reported a widening financial gap between crop and livestock producers, with profitability varying significantly by region and commodity concentration.
Despite the pressure, agricultural loan performance remains generally strong, although lenders expect credit quality to weaken further over the next 12 months.
Farm-Level Takeaway: Government payments are helping support farm income, but persistent liquidity pressure and uneven sector profitability leave many producers financially vulnerable heading into 2027.