A banker flipping through a stack of loan applications and a combine rolling through a soybean field are two images of the same problem: money leaving farms faster than it can come back.
The Midwest’s agricultural economy is showing fresh signs of strain. A recent regional survey from the Chicago Federal Reserve found third‑quarter repayment rates for non‑real‑estate farm loans fell for the eighth consecutive quarter — a slow, steady bleed that lenders say is now forcing tougher lending rules and, in some cases, pushing farms toward forced sales.
What the numbers say
Lenders responding to the Chicago Fed’s survey reported that 21% raised collateral requirements in the third quarter, while none loosened them. Even more stark: 92% expect net cash earnings for crop farmers — including government payments — to be lower this fall and winter than a year earlier. Nearly half of bankers surveyed anticipate forced sales or liquidations of farm assets will rise in the next three to six months. (See the Chicago Fed’s summaries for regional Ag trends: Chicago Fed.)
The American Soybean Association has painted a grim picture for row‑crop producers: 2025 is on track to be a third straight year of losses for soybeans, with futures at harvest down roughly 25%–30% from 2022. At the same time, analysts expect farm production expenses to climb by about $12 billion year over year to roughly $467.4 billion for 2025 — a hit to margins that’s difficult to paper over. The ASA’s analysis is available at the association’s site: American Soybean Association.
Why profits are pinched
A handful of overlapping shocks have converged. Tariffs put in place by the federal government raised the price of key imported inputs. Fertilizer costs spiked in the wake of Russia’s invasion of Ukraine. And borrowing costs rose after the Federal Reserve’s earlier interest‑rate hikes. On the demand side, the long pause in Chinese purchases of U.S. soybeans — only recently easing — left big inventories and weak pricing.
Those supply‑chain and trade dynamics are layered on top of weather and logistical problems. Low Mississippi River levels during parts of the year reduced barge capacity, raising transportation costs and making it harder for farmers to move grain to markets when prices were higher.
A fractured picture across the Corn Belt
Not every farm is suffering the same way. The Federal Reserve’s Beige Book snapshots across Corn Belt districts show a patchwork: some operations reported steep losses, others modest profits. Dry pockets cut yields in places; elsewhere, strong harvests masked poor price realizations. Input costs such as fungicides did prevent some crop losses but also added to bills.
In the Minneapolis district, for example, harvests were strong but incomes were still weak: almost 80% of ag lenders said third‑quarter farm incomes were down year over year, and 70% reported a drop in capital spending. In Kansas City, rising cattle prices supported some ranchland values even as cropland values held mostly steady.
The federal response — and its limits
The federal government moved to provide a $12 billion “bridge” aid package for farmers this season. Farmers and industry groups welcomed short‑term help but warned it won’t cover full losses. North Dakota State University’s Shawn Arita estimated losses for the nine major commodity crops this year could run $35 billion to $44 billion; American Soybean Association president Caleb Ragland said the $12 billion would cover roughly a quarter of soybean losses.
“As appreciative as we are of an economic bridge,” Ragland told reporters, “that money is just plugging holes and slowing the bleeding.”
What this means for rural communities
When loan repayment rates weaken and collateral rules tighten, the immediate risk is on the balance sheets of family farms. For lenders, that can translate into more conservative credit decisions; for farmers, delayed capital expenditures and deferred investments. Longer term, rising forced sales and liquidations can reshape rural land ownership, consolidate operations, and erode local tax bases — with ripple effects on Main Street businesses and school districts.
Policymakers face a difficult tradeoff. Short‑term aid stabilizes cash flows, but structural relief — trade restoration with major buyers, more predictable input prices, or policy that eases interest burdens — would be needed to prevent a multi‑year slump. USDA research on historical farm income cycles provides useful context for how prolonged downturns can ripple through rural economies: USDA Economic Research Service.
Farmers I spoke with described the choices in blunt terms: store grain and wait for prices, skip a planned equipment purchase, or sell land to cover debt. None are good options when the goal is keeping the operation going for the next generation.
The coming months will show whether recent upticks in some crop prices and resumed international buying are the start of a recovery or merely a pause before deeper restructuring. For now, the scene across the Corn Belt is one of cautious hope undercut by hard math — expenses up, prices down, and lenders growing less patient.
A few combine lights still blink through early‑morning fog, but for many families on those farms the ledger is the last thing to sleep.