Large operating and livestock loans continued to drive strong growth in farm lending activity at commercial banks in the first quarter of 2026, said Kansas City Federal Reserve Bank Associate Economist Ty Kreitman, in a Bank release.
According to the National Survey of Terms of Lending to Farmers, the volume of non-real estate loans for nearly all purposes was higher than a year ago, Kreitman said. Operating and feeder livestock loan volumes grew alongside further growth in average loan sizes and accounted for most of the increase.
Average farm loan interest rates were nearly unchanged from the previous quarter for the largest loans and declined slightly for smaller loans, the Bank release said.
OUTLOOK MIXED
The outlook for the US farm economy remained bifurcated, and uncertainty was heightened alongside recent volatility in commodity, energy and fertilizer markets, Kreitman said. Weakness in the crop sector persisted as profit opportunities were limited and surges in fertilizer and fuel prices raised concerns about increased costs.
Strength in the cattle sector continued to lift revenues in many areas, and recent distribution of payments from the Farmer Bridge Assistance Program was expected to provide modest support to farm income and credit conditions, Kreitman said. Despite ongoing challenges for many producers, farm real estate values remained resilient in recent months and provided support for the sector.
LENDING ACTIVITY INCREASES
Agricultural lending activity at commercial banks increased notably across most loan types, Kreitman said. The volume of total non-real estate loans increased nearly 50% from the same time a year ago.
Lending volumes increased notably for loans of all purposes except other livestock, and growth was particularly notable for operating and feeder livestock loans.
Operating loans grew alongside further increases in average loan sizes, he said. The volume of lending comprised of loans greater than $500,000 increased substantially and sharply compared with a year ago.
The share of new operating loans greater than $500,000 increased to a record high following steady increases in recent years, Kreitman said.
Feeder livestock lending also increased alongside larger loan sizes that have grown with higher cattle prices, he said. Following rapid growth in 2024 and 2025, the size and volume of feeder livestock loans increased at an average pace of about 15% and 25% over the past year, respectively. Loan sizes have grown rapidly as cattle prices reached record highs.
Farm loan interest rates remained above the recent historical average and changes from the previous quarter varied by loan size, Kreitman said. The average rate on loans greater than $100,000 was nearly unchanged from the previous quarter. In contrast, average rates on loans of smaller sizes declined slightly.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers last week ranged from $245.55 per cwt to $250.45, compared with the previous week’s range of $235.00 to $248.29 per cwt. FOB dressed steers and heifers went for $386.05 per cwt to $397.06, compared with $373.20 to $388.53.
The USDA choice cutout Monday was up $2.50 per cwt at $383.56 while select was up $7.01 at $383.61. The choice/select spread inverted widened to minus $0.05 from a plus $4.46 with 49 loads of fabricated product and 16 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $445.91 per cwt, and 50% beef was $193.82.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.02 to $1.15 a bushel over the May corn contract, which settled at $4.52, up $0.03 1/4.
No live cattle contracts were tendered for delivery Monday.
The CME Feeder Cattle Index for the seven days ended Friday was $375.69 per cwt, down $1.98. This compares with Monday’s Apr contract settlement of $368.87, down $2.45.