By Ty Kreitman
Farm income and credit conditions continued to deteriorate in the second quarter but showed signs of easing. According to lenders participating in Federal Reserve Surveys of Agricultural Credit Conditions, the pace of decline in farm loan repayment rates and farm income slowed slightly in recent months. Despite a slower pace of weakening, lenders continued to gradually tighten collateral requirements as challenges for crop producers persisted. Slightly higher crop prices in the second quarter and the recent distribution of payments from the Farmer Bridge Assistance Program likely contributed to the less pessimistic outlook. Further supporting financial conditions, farmland values remained strong and continued to bolster borrower balance sheets.
Second Quarter Federal Reserve District Ag Credit Surveys
Deterioration in loan performance continued but showed signs of moderating during the first half of 2026. The average pace of decline in farm loan repayment rates over the past four quarters slowed across all participating Districts during the second quarter (Chart 1). In the Minneapolis and St. Louis Districts, the share of lenders reporting that repayment rates were lower than a year ago dropped from an average of around 50% in 2025 to about 30% in the most recent survey.
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