A 2026 survey of more than 600 agricultural lenders finds liquidity remains producers’ top concern as operating costs climb and profitability varies sharply between crop and livestock operations.
U.S. farmers continue to face pressure on profitability and working capital, even as government payments and stronger conditions in parts of the livestock sector provide some relief.
The 2026 agricultural lender survey from the American Bankers Association and Farmer Mac paints a mixed picture of the farm economy. Agricultural loan performance remains generally strong, but lenders are seeing higher credit demand, increasing delinquencies and continued pressure on farm margins.
Three\-quarters of agricultural lenders surveyed said farm profitability had tightened in their local economies during 2026.
Lenders estimated that about 60% of agricultural borrowers would be profitable during the year, leaving roughly 40% expected to operate without a profit. The outlook was nevertheless better than lenders had anticipated a year earlier, in part because of projected record government payments.
Working capital remains a major concern
For farmers, one of the most significant findings may be the continued pressure on liquidity.
For the fourth consecutive year, agricultural lenders identified liquidity as the leading concern facing their farm customers. Higher operating expenses are adding to the challenge, while inflationary pressure rose sharply among lenders' concerns as higher energy costs increased farm input expenses.
Those conditions are translating into greater borrowing needs.
Lenders reported increased demand during 2026 for both agricultural production loans and loans secured by farmland. They expect demand in both categories to continue rising over the next 12 months.
That could make working-capital management particularly important heading into the 2027 production season. Producers carrying higher operating costs may need additional financing even when the underlying farm remains financially viable.
Crop and livestock producers are seeing different conditions
The survey also highlights an increasingly divided agricultural economy.
Lenders reported significant differences in profitability between crop and livestock operations, meaning the financial position of a farm can depend heavily on what it produces and where it is located.
Regional differences are also evident. Lenders indicated improving profitability for some permanent crop operations in the West, for example.
Jackson Takach, chief economist and head of Farmer & Ranch at Farmer Mac, said agricultural lenders are having to balance increasing demand for credit against market volatility, funding costs and greater competitive pressure.
The divergence is important because broad measures of the farm economy can obscure financial stress within individual commodity sectors. A relatively strong overall lending environment does not necessarily mean grain and oilseed producers, livestock operations and specialty crop farms are experiencing the same financial conditions.
Farm credit quality still relatively strong
Despite mounting pressure, the survey does not indicate a broad breakdown in agricultural credit.
Delinquencies and charge-offs increased, and lenders expect credit conditions to weaken further during the next 12 months. However, loan performance remains historically healthy.
Credit standards also appear relatively stable, with fewer lenders expecting to tighten underwriting requirements or loan terms.
Loan approvals remain high. Agricultural lenders reported an average 82% approval rate for new loan applications in 2026 and expect an 88% approval rate for renewal requests over the coming year.
That suggests credit remains available to many producers, although a farm's balance sheet, liquidity, debt servicing capacity and recent financial performance will continue to influence individual lending decisions.
Farmland values remain resilient
Farmland has also continued to hold its value despite weaker margins elsewhere in the farm economy.
Survey respondents reported modest increases in farmland values during 2026. Looking ahead, most lenders expect relatively little change in either farmland values or cash rental rates.
Stable land values can provide important balance\-sheet support for farm businesses, particularly operations that own a significant portion of the acres they farm.
However, strong land values do not necessarily solve short\-term cash\-flow problems. Farmers can have significant equity in land while still experiencing tight working capital because of high production expenses or weaker commodity returns.
What farmers should watch heading into 2027
For producers planning for another production cycle, the survey suggests liquidity and cash flow could be as important as overall farm equity.
Higher production costs are already increasing demand for operating credit, while lenders are keeping a close watch on loan performance. At the same time, historically healthy credit conditions and strong approval rates indicate that agricultural financing remains widely available.
Ryan Lee, research and economic policy manager at the American Bankers Association, said farm profitability has been better than lenders expected a year ago, supported in part by government payments. But he cautioned that financial stress has not disappeared, with working capital under pressure and demand for loans increasing.
The findings point toward another year in which individual farm circumstances may matter more than broad agricultural indicators. Commodity mix, production expenses, existing debt, liquidity and regional conditions could create very different financial outcomes from one farm to another.
The annual survey was conducted between July 13 and August 17, 2026, and included responses from more than 600 agricultural lenders representing financial institutions of different sizes and regions across the United States.
The American Bankers Association and Farmer Mac have conducted the agricultural lender survey annually since 2016 to assess conditions in the farm economy, farmland values, agricultural credit and expectations for the year ahead.
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