Rising Farm Debt and Financial Stress: Evidence from the Ag Economy Barometer

Feb 09, 2026

By Michael Langemeier and Joana Colussi

After increasing by 9.1% in 2024, current U.S. farm debt is expected to increase 3.8% in 2025 (USDA-ERS, 2026). Current debt includes operating loans and principal payments related to machinery, buildings, and farmland that are due within one year. This article examines trends in the size of a farm’s operating loans, reasons why operating loans may be larger, financial stress, and balance sheet strength using data from the Purdue University-CME Group Ag Economy Barometer (AEB) surveys over the last seven years.

The AEB survey is conducted each month to gauge producer sentiment among a group of approximately 400 U.S. agricultural producers (Langemeier and Colussi, 2026). In addition to questions pertaining to sentiment, monthly AEB surveys periodically include questions pertaining to operating loans and balance sheet strength.

Projected Changes to Operating Loans

In January of the last seven years, the AEB surveys have included operating loan questions. The first operating loan question was as follows: Compared to last year, do you expect the size of your farm’s operating loan to be larger, smaller, or about the same? Over the last seven years, the percentage of respondents who indicated that they expected to have larger operating loans ranged from 15% in 2020 and 2024 to 27% in 2022. The survey respondents that answered “larger” increased from 18% in 2025 to 21% in 2026 (see Figure 1).

A follow-up question asked about the reason for their farm’s larger operating loan. Response choices included: increase in input costs, increase in operating size, and unpaid operating debt from prior years. Figure 2 summarizes the results from 2020 to 2026. An increase in input costs was the most common response in each of the years. However, there was a large range in the percentage of respondents who chose this response over time. From 2021 to 2024, over 60% of the respondents chose “increase in input costs” as the reason for higher operating loans. In 2020, 2025, and 2026, from 45 to 56% of the respondents chose this response. On average, approximately 18% of the respondents indicated that an “increase in operation size” was the reason for their larger operating loan. Respondents choosing the “unpaid operating debt from prior years” response averaged 21% and ranged from a low of 5% in 2023 to a high of 35% in 2020. In 2026, 31% of the respondents indicated that this was the reason for their higher operating loan, up sharply from the previous year.

Source : illinois.edu

Video: Western Canadian Agriculture: Hard Times Made the World's Best Farmers

Western Canadian agriculture produced the most advanced farmers in the world not through abundance but through adversity. The crow rate fell. The wheat price went nowhere. The brown envelopes stopped.

When the subsidies disappeared, the bad farmers left and the good ones stayed. And the ones who stayed could not just grow wheat anymore. They started growing lentils and canola and peas and flax and faba beans. They built crop rotation. They got serious about agronomy because there was no government backstop. That process produced the Western Canadian agriculture Dennis Bulani describes in this clip: the most advanced, most educated farming culture in the world.

His contrast with Iowa corn and soybean farmers is sharp. At a DeKalb farmer meeting in Okoboji, Iowa, he asked what crop rotation they ran. Beans on corn stubble, corn on bean stubble. How do you fertilize? The co-op agronomist handles it. Have you considered other crops? No need. We make so much money on corn and soybeans. Western Canadian agriculture was never allowed that comfort. And now those Iowa farmers are watching soybean markets lock up with China and corn prices slide, and they do not have the agronomy knowledge or the research base to pivot. Western Canadian farmers adapted on a dime because they had done it before.

Dennis also makes the case that Western Canadian agriculture keeps adapting in real time. Low commodity prices over the past year have pushed growers to look seriously at precision spot-spray technology. He knows a neighbor who bought a sprayer with the seeing-eye system and sprayed only 80 out of 320 acres. As a chemical retailer Dennis acknowledges that will affect his sales. He supports it anyway, because if it advances Canadian agriculture and makes farmers money, that is a good outcome.

The lesson Dennis draws from the tale of two farms: continuous improvement is the only durable strategy. When canola was $22 a bushel some growers went to Arizona instead of the Crop Production Show. When the price came down those same growers came back to the research and the discipline. Products do not go on Rack Petroleum's shelves unless they pass a replicated trial first. That is what Western Canadian agriculture built through hard times: farmers who do the work whether the times demand it or not.

Dennis Bulani is CEO of Rack Petroleum and Ultimate Yield in Biggar, Saskatchewan. Dan Aberhart hosts GTF Productions, Western Canadian Agriculture's foremost live briefing platform and its foremost AI training platform for ag operators