Center for Agriculture and the Economy
Leveraging expertise from the Kansas City Fed, the Center provides timely analysis of industry developments and conducts ongoing research on the agricultural economy.
High production costs and subdued liquidity spurred strong farm lending activity in 2025
February 5, 2026
By Ty Kreitman
Estimates from the National Survey of Terms of Lending to Farmers showed a 20% year-over-year increase in the average inflation-adjusted volume of new farm operating loans at commercial banks during 2025. Demand for financing grew considerably for the second consecutive year alongside elevated production expenses and subdued liquidity in the sector, particularly for crop producers challenged by narrow profit margins. The latest Ag Finance Update describes how the growing size of operating loans continued to drive increases in lending volumes over the past year.
*Average annual volume of loans for current operating expenses estimated in the Survey of Terms of Lending to Farmers.
**Total U.S. farm sector production expenses less interest expenses and capital expenditures.
Sources: USDA, Survey of Terms of Lending to Farmers, Federal Reserve Bank of Kansas City and Federal Reserve Bank of Kansas City staff calculations
The National Survey of Terms of Lending to Farmers collects a sample of newly issued farm loans from a voluntary panel of commercial banks each quarter, and the results are used to estimate aggregate farm lending activity. Subscribe here to receive email updates about all the latest data releases and insights from the Center for Agriculture and the Economy.
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Through regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on U.S. and global agriculture. Leveraging this expertise, the Center for Agriculture and the Economy serves as a resource within the Federal Reserve System by providing timely analysis of industry developments and conducting ongoing research on the agricultural economy. The Kansas City Fed is committed to understanding developments in the agricultural economy and gathering perspectives from rural America in order to include them in discussions on the national economy.
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Agriculture is central to the Kansas City Fed’s 10th District’s economy, from farm production and food manufacturing to agricultural banking and finance. Through its regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on the U.S. and global agricultural economy. At the same time, connecting with stakeholders and ag industry professionals through events, round tables and conversations is critical to the Bank’s work.