USDA Projects Record Farm Debt as Costs Rise and Income Slips
USDA forecasts total U.S. farm debt will reach a record $605.1 billion in 2026, up 4.6 percent from 2025. Production expenses are expected to rise to $492.8 billion while net farm income falls 2.6 percent to $158.4 billion. The projections point to tighter margins even as farm assets and equity continue to grow.
USDA’s Economic Research Service forecasts 2026 farm debt at a record $605.1 billion, 4.6% above 2025 and 1.5% higher after inflation. Real-estate borrowing is projected at $399 billion; non-real-estate debt at $206.1 billion. Production costs may reach $492.8 billion, while net farm income slips 2.6% to $158.4 billion, or 5.5% in real terms.
Farm assets are seen at $4.47 trillion and equity at $3.86 trillion, with real estate representing 83% of assets. The debt-to-asset ratio rises to 13.54% from 13.34%. Working capital grows 3.5% after a 15% drop, though the debt service ratio points to possible weaker liquidity.
Tighter farm margins could ripple through rural communities, affecting farm households, workers, input suppliers, lenders, and food processors. If producers borrow more while income softens, some may delay equipment purchases or reduce spending,