Debt Bombs Are Ticking On America’s Farms

American farmers are drowning in record debt, and federal officials fear billions more in borrowing could be slipping under the government’s radar.

U.S. agricultural debt is expected to reach a record $605.1 billion in 2026, according to the Department of Agriculture (USDA), but a growing reliance on unconventional lenders could mean the true figure is considerably higher, Reuters reported Thursday. Farmers are simultaneously grappling with depressed crop prices, trade disputes that disrupted exports to China and soaring fertilizer and diesel costs fueled by the war with Iran.

The USDA is now investigating how much farmers actually owe and whether financial trouble in agriculture could spill into the broader economy.

“There are new lenders popping up and we need to find ways to access that data,” said Jeffrey Hopkins, acting assistant administrator at USDA’s Economic Research Service.

The USDA projects the agricultural sector’s debt-to-asset ratio will rise to 13.54% this year. Inflation-adjusted farm debt has more than doubled since 2000, according to Reuters.

Much of the concern centers on farmers increasingly borrowing from equipment manufacturers, agricultural suppliers, cooperatives and other lenders whose loans are harder for federal officials to track.

A 2024 study involving Kansas State University and USDA researchers found that equipment borrowing from nontraditional lenders could be as much as four times greater than official figures suggested.

Roughly half of commercial farms relied on nontraditional or vendor lenders to finance operations this past season, according to an agricultural economics firm cited by Reuters.

American farmers are also struggling to sell their crops abroad. Washington’s trade battles with Beijing disrupted agricultural exports, while a September agreement to reduce tariffs on some farm products excluded soybeans, a major American export.