An Iowa farmer and his son load soybean seed into a planter on May 6 near West Bend, Iowa, the US. SCOTT OLSON/GETTY IMAGES

Farm debt rises

The trade losses have cascaded through the farm economy.

The Federal Reserve Bank of Kansas City found that farmers were taking larger operating loans and taking longer to repay them, a report by the American Farm Bureau Federation said. Nearly 40 percent more farm operating loans were opened in the fourth quarter of 2025, compared with the same period in 2024.

Total farm debt reached a record $624.7 billion in early 2026 — up $30.8 billion, or 5 percent, from the year before, according to the federation. It was the second consecutive year of 5 percent farm debt growth.

Critically, the debt growth was not from investment or expansion but from necessity: Farmers were borrowing simply to cover input costs.

"Farm debt continues to rise as producers rely on borrowing to manage elevated operating costs and uneven cash flow," the report concluded. The situation was, in the federation's assessment, "a generational downturn rather than a temporary slowdown".

In addition, more farmers filed for bankruptcy in 2025, the federation said. A total of 315 farm bankruptcies were filed in the calendar year, up 46 percent from 2024.

The US Midwest and Southeast were the hardest hit, with the regions seeing 121 and 105 bankruptcy cases filed, respectively. The numbers represented a 70 percent year-on-year increase in filings in the Midwest, and a 69 percent rise in the Southeast.

In addition, the number of US farms was reduced by 15,000 in 2025, reflecting a broader trend in farm closures, according to the American Farm Bureau Federation.

This year, US farmers have been hit by another major shock with the US-Iran military conflict sending fuel and fertilizer costs sharply higher.

A survey of 400 farmers, conducted by researchers at the Purdue Center for Commercial Agriculture in late March, found that almost half said their farm operations were financially worse than a year earlier.

With the rising price of land, rent, equipment, fertilizer and fuel, US farmers have been struggling with thinning margins. In February, before the start of the Iran conflict, the USDA projected the US farm income will slip lower in 2026.