NASHVILLE, TN – Farm lending activity strengthened in 2025 as producers relied more heavily on operating loans to manage tighter cash flow and higher production costs. New data from the National Survey of Terms of Lending to Farmers show a sharp increase in both the size and volume of non-real-estate farm loans.
The volume of new operating loans rose nearly 40 percent year over year in the fourth quarter and averaged more than 20 percent growth across 2025. Inflation-adjusted operating loan sizes were about 30 percent larger than the previous year, reflecting elevated input costs and expanded financing needs. Increased feeder cattle lending also contributed to stronger loan demand.
Loan terms adjusted alongside rising balances. Average maturities for operating loans increased by roughly three months from 2024 and reached record highs late in the year. Machinery and equipment loan maturities also lengthened, signaling efforts to spread repayment over longer periods.
Interest rates moved lower but remained above long-term norms. Rates on non-real-estate loans declined for the sixth straight quarter, with larger loans seeing greater reductions than smaller notes. At the same time, more than 80 percent of operating loans carried variable rates as borrowers positioned for potential further declines.
Farm-Level Takeaway: Bigger operating loans are helping farms manage costs, but they also signal growing reliance on borrowed capital.