US farm finances and credit conditions continued to weaken in the second quarter of 2025.
According to the Federal Reserve’s 10th District Survey of Agricultural Credit Conditions, the region’s farm income and loan repayment rates declined at a pace similar to recent quarters, a Kansas City Federal Reserve Bank release said.
Deterioration in agricultural credit conditions was most pronounced in areas more dependent on crop revenues, but strong cattle prices continued to support farm finances in some parts of the region, the release said. While lenders reported an increase in loan repayment problems, the majority of issues remained minor, and recent assistance related to the American Relief Act was expected to provide modest support to producers.
OUTLOOK REMAINS SUBDUED
The outlook for the US farm economy remained subdued through mid-2025 alongside relatively low crop prices, the Bank said. Weak profit margins for key crops have reduced working capital for many producers and led to increased loan demand.
Financing costs also remained elevated alongside relatively high interest rates, the release said. Agricultural real estate values declined slightly through the first half of 2025 but remained strong, providing some support to farmer balance sheets.
Farm financial conditions in the 10th district tightened gradually alongside weak crop prices, the Bank release said. According to survey respondents, the pace of decline in farm income was similar to recent quarters.
Despite ongoing strength in the cattle sector, farm finances in the region tightened considerably as profit opportunities for crop producers remained limited, the Bank said.
CROP FARMERS AFFECTED MORE
Farm income deteriorated most in areas more heavily concentrated in crop production, the release said. The share of lenders that reported farm income was lower than a year ago was highest in Nebraska, Missouri and Kansas where corn and soybeans comprise a comparatively large share of aggregate state farm revenues.
In Oklahoma, however, half of respondents indicated farm income was higher than the same time last year, the report said.
Producers who were primarily renters could be more exposed to financial pressures, the bank said. About 60% of survey respondents answered that the financial conditions of majority owner-operators were at least modestly stronger than majority renter-operators.
Renters have a more limited ability to leverage strength in farmland valuations to improve working capital positions and could be more challenged by weak crop profits, the release explained.
As financial conditions tightened, demand for credit increased steadily, the bank said. Much like farm income, the pace of increase in demand for non-real estate farm loans also was similar to recent quarters.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $236.15 per cwt to $241.75, compared with last week’s range of $235.00 to $247.10 per cwt. FOB dressed steers and heifers went for $371.08 per cwt to $382.02, compared with $366.72 to $388.63.
The USDA choice cutout Thursday was up $3.30 per cwt at $393.79 while select was down $1.08 at $366.88. The choice/select spread widened to $26.91 from $22.53 with 68 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $418.34 per cwt, and 50% beef was $181.69.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.30 to $1.45 a bushel over the Sep corn contract, which settled at $3.75, up $0.01.
No live cattle delivery intentions were posted.
The CME Feeder Cattle Index for the seven days ended Wednesday was $346.01 per cwt, up $1.92. This compares with Thursday’s Aug contract settlement of $340.40, down $5.47.