US farm debt hits record $605 bn
AgenciesAmerican farmers are borrowing more money than ever before to operate — but the rise in non-traditional and vendor credit has created some gaps in the federal government’s...
In the United States, farm debt has reached an all-time high of $605 billion, according to the latest estimates from the US Department of Agriculture (USDA). This record-breaking figure marks a more than doubling of debt since 2000, when US farm debt was around $300 billion. The surge in debt is attributed to various factors, including years of tight margins due to slumping prices, high input costs, export market disruptions from trade disputes, and the impact of the US-Iran war on fertilizer and fuel prices.
However, the USDA estimates may not fully capture the true extent of farm debt, as farmers are increasingly turning to non-traditional lenders such as suppliers, farmer cooperatives, equipment manufacturers, and financial technology firms. These non-traditional lenders are more challenging for the government to measure comprehensively.
Jenny Ifft, a Kansas State University agricultural finance professor, estimates that there could be two to three times as much debt as what the USDA reports in its "individual and others" category, which was $45 billion in 2025.
To address this data gap, the USDA is launching research projects to better track non-traditional farm lenders and assess whether financial stress in agriculture could be affecting the broader economy. The agency is cross-referencing farmer surveys with USDA Farm Service Agency loan records and conducting research to determine the size of the non-traditional lending market. USDA officials hope to have results within two years.
Roughly half of all US commercial farms relied on vendor or non-traditional lenders to cover operational expenses last season, up about 10% from the previous year. This trend has raised concerns about potential spillover effects to the broader economy, similar to the subprime mortgage crisis of 2007-2010. Historically, USDA measures farm debt based on data reported by banks, Farm Credit institutions, and other lenders.
However, to gauge vendor credit, the USDA typically uses its Agricultural Resource Management Survey, a 24-page questionnaire that has seen a significant drop in response rates from 68% in 2009 to nearly 33% in 2025.
The USDA's efforts to improve debt tracking are crucial, as previous research has found evidence that the agency significantly undercounts equipment debt. A 2024 study from Kansas State University, USDA's Economic Research Service, and the National Credit Union Administration analyzed over 4.4 million equipment liens across 14 farm states from 2001 through 2019, highlighting the need for more accurate data on farm debt.
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