The U.S. agricultural sector is under financial pressure as 2025 begins. A report from the Federal Reserve Bank of Kansas City highlights weakening farm income and loan repayment rates in the third quarter of 2024. High input costs and lower commodity prices are the primary culprits behind this downturn.
Farmers are borrowing more to manage rising costs, even as average farm loan interest rates have seen a slight decline. The financial strain is felt most in crop-producing regions, where price surpluses have suppressed market rates.