MINNEAPOLIS, MN – Agricultural credit demand is increasing as higher operating costs squeeze working capital, while lenders are also beginning to see signs of weaker loan performance.
The American Bankers Association and Farmer Mac say demand rose in 2026 for both production loans and farmland-secured credit. Lenders expect borrowing demand in both categories to increase again over the next 12 months.
Loan delinquencies and charge-offs also increased, although agricultural credit quality remains historically healthy. Lenders rank deterioration in agricultural loans as their top institutional concern and expect additional weakening during the coming year.
Banks have not responded with broad credit tightening. Survey respondents reported an average approval rate of 82 percent for new agricultural loans and expect about 88 percent of renewal requests to be approved.
Farmland values also remain relatively resilient, with lenders reporting modest increases during 2026 and generally expecting little change in values or cash rents over the next year.
Farm-Level Takeaway: Producers continue finding access to credit, but rising borrowing needs and early signs of deterioration are keeping lenders focused on risk heading into 2027.