By Kellan Heavican (Brownfield)
A recent survey shows that farm profitability has tightened in 2026.
Ryan Lee with the American Bankers Association says the outlook has improved over the last two years, but, “That’s largely been driven by government payments and strong cash receipts for livestock.”
The annual survey from ABA and Farmer Mac of 600 ag lending institutions found that 60 percent of borrowers will be profitable this year.
But, Lee tells Brownfield, federal assistance plays a major role. “The problem with that is that the amount and timing of government support is not guaranteed. Over 80 percent of lenders responded that they don’t include government payments that have not been approved yet in their underwriting decisions. The uncertain environment makes it challenging to predict future profitability.”
However, he says delinquency rates remain historically healthy, but that number could rise next year. “About 50 percent of lenders reported they expect higher delinquency rates for ag production loans. When it comes to farm real estate, the concern is a little bit less, about 30 to 35 percent.”
Lee says borrowers are looking at liquidity and cash flow because operating costs are at record highs.
