American agricultural lenders report continued pressure on farm profitability, with borrowers’ working capital ranking as their top concern for the fourth year in a row, according to the annual survey by the American Bankers Association and Farmer Mac, reported by DTN.
Three-quarters of respondents, 75%, said profitability had declined among their borrowers in 2026. Bankers estimated 59% of borrowers would be profitable this year, compared with 52% in 2025 and 81% in 2022, and expect that share to slip to 56% in 2027. Only 5% expect overall farm profitability to rise next year.
Livestock is doing better than crops. Lenders with livestock-heavy portfolios estimated 66% of borrowers would be profitable, against 57% among those with crop-heavy portfolios.
Cotton has overtaken grains as the leading commodity concern, with high concern reported by 55% of bankers exposed to cotton and 53% for grains, though concern over grains eased from 69% last year.
Government payments are playing a growing role. Projected record payments of roughly $47 billion have helped offset narrow margins. About half of lenders said payments made up at least 25% of their borrowers’ net income, up from 30% of lenders last year. Nearly three-quarters reported increased reliance on them in 2026, and 67% expect that to rise in 2027.
“Credit demand is rising just as market volatility, funding costs, and competitive pressures are intensifying,” said Jackson Takach, chief economist at Farmer Mac.
Source: DTN / Progressive Farmer
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