Ag credit conditions continued to deteriorate gradually in the second quarter of 2026, but the level of financial stress was modest and farmland values remain strong. That’s according to the most recent survey of ag bankers in the Plains by the Federal Reserve Bank of Kansas City.
The bank notes: “Farm incomes remain subdued, but the pace of decline slowed slightly from previous months. Credit conditions continue to tighten steadily and lenders report financial conditions were relatively weaker on average for smaller farms and farms that are majority renters, but most loan repayment issues remained minor.”
The fed bank serves Kansas, western Missouri, Nebraska, Oklahoma and the Mountain States of Colorada, northern New Mexico and Wyoming.
While the survey found ongoing financial challenges in the crop sector, the bank says cropland values are strong and ranchland values grew to new record highs.
It notes the cattle sector is the exception with strong incomes boosting financial conditions in many areas. It says government payments and strong land values have supported farm balance sheets and have kept overall ag financial conditions “resilient.”
Nonirrigated and irrigated cropland values rose about 1% and 4% from a year ago, respectively, during the second quarter. Ranchland values, meanwhile, jumped more than 7%. Looking ahead to the next three months, lenders expect steady cropland values and additional gains in ranchland values.
Cropland cash rents declined slightly but rose for ranchland. Average rents dropped about 2% from a year ago for irrigated and nonirrigated cropland but increased about 6% for ranchland. Bankers expect steady rents for cropland for the next three months and some gains for ranchland.
