Agricultural lenders reported continued pressure on farm profitability in 2026, as 75% of respondents in an annual survey by the American Bankers Association and Farmer Mac said net income had tightened in their local agricultural economies.
While the losses have been offset by record government payouts, lenders estimated that 40% of ag borrowers would not be profitable this year.
“Agricultural lenders are navigating a delicate balance: credit demand is rising just as market volatility, funding costs, and competitive pressures are intensifying,” Jackson Takach, chief economist and head of Farmer & Ranch at Farmer Mac, said in a press release.
“The institutions best positioned for the year ahead will be those that combine disciplined risk management with technology, secondary-market tools and the strong borrower relationships that have long defined agricultural lending.”
The survey, released Nov. 4 at the ABA’s Agricultural Bankers Conference in Minneapolis, found that even with tighter profit margins, agricultural loan performance remained strong despite continued financial pressure.
Those cost pressures include higher gasoline and diesel fuel prices linked to the U.S. war with Iran and the ongoing conflict between Ukraine and Russia, where diesel refineries have been damaged in air strikes.
