US farm sector debt-to-asset ratio has risen modestly since its 2023 low (12.9%) toward ~13.5% by 2025-26, with stress concentrated in Midwest/Plains row-crop operations, not cattle

Summary

The U.S. farm sector's debt-to-asset ratio — the standard national gauge of leverage relative to the value of farmland, buildings, equipment and other assets — bottomed at 12.94% in 2023 and has since edged up to 13.36% (2024) and a USDA-forecast 13.34% (2025) and 13.54% (2026). That is a modest ~0.6 percentage-point rise off the trough, not a dramatic deterioration: it remains far below the 1980s farm-debt-crisis peak (over 20%) and only slightly above the 2020 pandemic-era level (14.1%). The rise is happening because debt has been growing faster than asset values: total farm debt is forecast to reach $605 billion in 2026, up about 16.5% from 2023, while farm assets have grown about 11.3% over the same span, mostly on continued farmland-value appreciation.

That modest national number masks a real, well-documented split: stress is concentrated in row-crop (corn, soybean, wheat) operations in the Midwest and Plains, where several years of falling crop prices and elevated input/interest costs have squeezed margins, while cattle and other livestock producers — benefiting from historically high cattle prices — are in comparatively strong financial shape. Federal Reserve regional agricultural credit surveys (Kansas City and Chicago Fed districts) report rising loan delinquencies, more loan renewals/extensions, and bankers expecting more forced liquidations among crop farms, even as farmland values have stayed firm or risen — a combination that is propping up the balance-sheet ratio even as cash-flow stress builds underneath it.

The national debt-to-asset trend

USDA ERS Farm Income and Wealth Statistics (national, Dec. 31 values, excluding operator dwellings) show:

The ratio fell through 2020-2023 as record land-value appreciation and strong 2021-2022 commodity prices boosted the asset side faster than debt grew. Since 2023 that dynamic has partly reversed: debt growth (4.6% forecast for 2026 alone) is now outpacing asset growth, so the ratio is drifting back up, though it has not reversed the prior decline — it sits roughly where it was in 2018, well under the 2020 peak and far under any historical crisis level.

Where the stress is concentrated: crops, not cattle; Midwest/Plains, not the whole country

The ERS national balance-sheet table used above does not publish the debt-to-asset ratio broken out by state or by commodity — only national totals plus a debt breakdown by lender type (Farm Credit System, commercial banks, Farm Service Agency, individuals, life insurers). To answer the regional/commodity part of the question, this analysis draws on the Federal Reserve System's regional agricultural credit surveys, which query agricultural bankers directly about the loan books they see:

• Kansas City Fed (10th District: Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri, northern New Mexico) reports that farm income and credit conditions have deteriorated steadily “throughout the Midwest and plains states” as crop-sector profit opportunities stayed weak, while cattle and other livestock strength supported finances in some areas. Farm loan delinquency ran near 1.3% in 2025 — rising modestly but still historically low — while demand for new farm loans grew alongside tighter working capital and elevated production/interest costs. Farmland values in the district stayed firm despite the deterioration in cash-flow measures.
• Chicago Fed (7th District: Iowa, and most of Illinois, Indiana, Michigan, Wisconsin) — the core Corn Belt — reports (AgLetter, Q3 2025) that loan delinquency rates are rising, nearly half of surveyed ag bankers expect an increase in forced liquidations, repayment rates have slowed relative to a year earlier, and renewals/extensions of loans have increased — all signs of building stress specifically among row-crop operations, driven by several straight years of falling corn/soybean prices (partly due to lost export share to Brazil) against rising input costs. The same survey found farmland values still up about 3% year-over-year, and noted that buyers of farmland tend to be well-capitalized existing farmers rather than distressed sellers — which is part of why the asset side of the balance sheet is not (yet) falling in tandem with crop-sector cash stress.
• Livestock exception: both districts single out cattle producers as the exception to the negative pattern — strong beef demand has pushed cattle prices to historic highs, and bankers in both surveys expect cattle/hog operations to report higher cash earnings than a year ago, in contrast to crop and dairy operations expecting lower earnings.

Put together: the modest national uptick in the debt-to-asset ratio is a highly averaged number. It is being driven disproportionately by row-crop operations concentrated in the Corn Belt and Great Plains, where multi-year price weakness plus higher interest and input costs have raised loan demand, delinquencies, and expected forced liquidations even while farmland values (the asset side) hold up. Cattle-heavy operations, by contrast, are in comparatively strong shape and are not contributing to the stress signal.

Data and methodology notes

The debt-to-asset ratio and dollar debt/asset series above are the USDA Economic Research Service's official Farm Income and Wealth Statistics, queried directly (ag.ers_farm_income table, category='Solvency'/'Debt to asset ratio' and category='Farm sector debt'/'Farm sector assets', state='US'). ERS's own convention marks the most recent 1-2 years (2025, 2026 here) as forecasts rather than realized data — that is disclosed in the table above rather than presented as final. This table carries only the U.S. national total for the ratio; it does not break debt-to-asset out by state or by commodity specialization, so the regional/crop-concentration half of the question was answered from the two Federal Reserve regional agricultural credit surveys that do query lenders about crop-vs-livestock and Corn-Belt-vs-Plains conditions directly. Those Fed sources are qualitative/survey-based (banker sentiment and reported delinquency rates), not a balance-sheet ratio computed the same way as the ERS figure, so the two halves of the answer are not directly comparable numbers — they are complementary views of the same underlying stress.

Every query behind this report

5 warehouse calls ran in this session, in order. Each is reproducible against the same snapshot.

SELECT DISTINCT category, subcategory, variable_description_total, unit_desc FROM ag.ers_farm_income WHERE state='US' AND (category ILIKE '%debt%' OR category ILIKE '%asset%' OR subcategory ILIKE '%debt%' OR subcategory ILIKE '%asset%' OR variable_description_total ILIKE '%debt%' OR variable_description_total ILIKE '%asset%')

SELECT "year", amount FROM ag.ers_farm_income WHERE state='US' AND category='Solvency' AND subcategory='Debt to asset ratio' AND "year">=2010 ORDER BY "year"

SELECT DISTINCT state FROM ag.ers_farm_income WHERE category='Solvency' AND subcategory='Debt to asset ratio' LIMIT 60

SELECT DISTINCT state FROM ag.ers_farm_income WHERE category='Farm sector debt' AND subcategory='All' AND "year"=2023

SELECT "year", category, amount FROM ag.ers_farm_income WHERE state='US' AND "year">=2019 AND category IN ('Farm sector debt','Farm sector assets') AND subcategory='All' ORDER BY "year", category