The three months of 2026 were not good ones for farmers and ranchers, according to a quarterly survey conducted by the Federal Reserve Bank of Minneapolis.
Regional Outreach Director Joe Mahon says 76 percent of lenders reported farm income was down from this time last year.
“A continued downward pressure on incomes a little bit better on the income side than we’ve seen in some recent quarters, but actually still firmly in negative territory, and after a kind of a bump at the end of 2025 in the fourth quarter, we kind of saw them turn back downward again.”
Mahon says another bit of negative news is that interest rates have started to tick back up.
“We had been seeing over the last couple of years some easing in interest rates that seems to have petered out over the last quarter. So interest rates kind of either moved sideways or up slightly on farm loans, in spite of that increased demand for farm loans, and that’s because of that tighter cash picture, and then a downturn in repayment rates on those loans as well. That’s kind of that credit quality piece.”
Mahon says demand for loans is also on the rise.
“Nearly half of the lenders we surveyed told us that loan demand increased over the last quarter. Only about 13% told us that that loan demand decreased. Repayment rates: nearly half of them told us that the rate of repayment on farm loans went down.”
Mahon points out that the repayment rate going down is not necessarily an indicator of delinquency because it could also include early repayment.
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