Farm Profitability Tightens as Delinquencies Loom
A new American Bankers Association and Farmer Mac survey finds farm profitability has tightened in 2026, with lenders bracing for higher loan delinquencies next year.
Updated on Nov. 6, 2026 in Agriculture
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Sixty percent of farm borrowers are expected to be profitable in 2026, according to a survey of 600 agricultural lending institutions conducted by the American Bankers Association and Farmer Mac. About half of ag lenders expect delinquency rates for production loans to rise next year.
Why it matters
Government payments have driven the improved farm outlook over the last two years, and that support is difficult to predict going forward. Record-high operating costs and a focus on liquidity and cash flow leave farm operations more exposed to any shift in lending conditions.
The survey covered 600 ag lending institutions, with over 80 percent of lenders excluding unapproved government payments from underwriting decisions. Delinquency rates for agricultural borrowers remain historically healthy, though about 50 percent of lenders expect production-loan delinquencies to climb.
The players
American Bankers Association
The American Bankers Association is a national trade group representing the banking industry across the United States.
Farmer Mac
Farmer Mac, formally the Federal Agricultural Mortgage Corporation, is a government-sponsored enterprise that supports agricultural lending in the United States.
The details
Lenders reported that operating costs for farms are at record highs and that borrowers are concentrating on liquidity and cash flow. Delinquency rates for agricultural borrowers remain historically healthy even as lenders anticipate pressure ahead.
Timeline
2026: Farm profitability tightens, with 60 percent of borrowers expected to be profitable.
Next year (2027): Lenders anticipate possible rises in ag production loan delinquency rates.
Market Landscape
The improved farm outlook of the last two years rested largely on government payments rather than on market fundamentals alone. With those payments harder to forecast, lenders are tightening their view of farm profitability heading into 2027.
Farm borrowers should expect tighter lending conditions and closer scrutiny of cash flow as delinquency risk rises. Producers relying on government payments face uncertainty about future support when planning operating budgets.
The takeaway
Farm operators should build liquidity buffers and plan for scenarios where government payments shrink. Lenders and borrowers alike are watching cash flow closely as the 2027 outlook takes shape.
Further reading
For broader coverage of farm finance and rural economic conditions, see Agriculture.
Source note: This article includes information reported by KJAN.
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