Information from the U.S. Department of Agriculture (USDA) shows that total debt held by the farm sector has increased significantly between 2012 and 2022. The report summary from USDA’s Economic Research Service notes that farm debt has been rising steadily, reaching $504 billion in 2021, a 34 percent increase since 2012. Most of this debt is tied to real estate, making up two-thirds of the total.
The report shows that commercial banks and the Farm Credit System (FCS) are the main lenders for farm real estate, holding about 80 percent of the debt. In 2022, the FCS provided nearly half of all real estate loans, while commercial banks covered 32 percent. Other lenders include life insurance companies, individuals, and the USDA’s Farm Service Agency, which only accounted for a small portion.
The report warns that higher debt relative to income can hinder growth and lead to financial struggles for farmers, especially with rising interest rates. The FCS plays a bigger role as farms grow in size, while smaller farms rely more on other sources like credit cards for non-real estate loans. Interest rates on farm loans have decreased recently, but overall debt has grown, which could impact farm profitability.
Listen to the report below.
![](https://i0.wp.com/agnetwest.com/wp-content/uploads/2017/07/Brian-Field-2017-slim.jpg?resize=134%2C150&ssl=1)
Brian German
Ag News Director / AgNet West