US Farm Debt Hits Record $605 Billion Amid Data Gaps
The US Department of Agriculture reports record farm debt of $605 billion while warning that non-traditional lending may be significantly undercounted.
Inflation-adjusted farm debt in the United States has reached a record high of more than $605 billion this year. The United States Department of Agriculture reports that financial pressure on growers has been driven by slumping prices, high input costs, trade disputes with China, and increased fuel and fertilizer costs resulting from the US-Israeli war with Iran.
USDA officials admit that official figures likely undercount total debt due to a rise in non-traditional and vendor credit from fintech firms, cooperatives, and suppliers. For example, the financing arm of the Land O'Lakes cooperative grew its committed loans to more than $1 billion for crop year 2027. Some estimates suggest this non-traditional debt could be two to three times higher than current government reports.
In response, the USDA is launching research projects to better track these hidden liabilities and assess potential systemic risks to the broader economy, citing the 2007-2010 subprime mortgage crisis as a precedent. Agency officials and academic experts emphasize the need for better data to accurately assess farm financial stress when many lenders serving the most stressed borrowers do not report their volumes.
