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Ag Economy in Distress: Costs Soar, Crop Prices Plummet
14 Dec
Summary
- Farm loan repayment rates in the Midwest have declined for eight consecutive quarters.
- Nearly half of surveyed bankers anticipate rising forced sales of farm assets.
- 2025 is projected to be a third consecutive year of losses for crop farmers.
Financial conditions in the U.S. agriculture sector are worsening, marked by persistently high costs and declining crop prices. A recent survey revealed that repayment rates for non-real-estate farm loans in the Midwest have decreased for eight consecutive quarters. Additionally, a significant majority of lenders reported increased collateral requirements for farm loans, with none indicating any easing.
Looking ahead, nearly half of the bankers surveyed foresee a rise in forced sales or liquidations of farm assets due to financial distress among farmers within the next three to six months. The American Soybean Association projects 2025 to be the third consecutive year of losses, with futures prices significantly lower than in prior years, while farm production expenses are expected to climb.
