Farm incomes drop despite abundant harvests

Farm incomes generally decreased across the Federal Reserve Bank’s Ninth District. That’s according to lenders responding to the fourth quarter Ag Credit Survey by the Minneapolis Fed. Lenders also reported that purchases of capital inputs fell, though farm household spending continues to edge up. Demand for loans increased, while the rate of loan repayment dropped, and loan renewal and extension activity increased. Interest rates for agricultural loans fell notably. Land values in the district barely increased from the previous year, while cash rents were mixed. The outlook for the first quarter of 2026 was pessimistic, and survey respondents expected a further decrease in farm incomes. Capital expenditures also dropped, as 56 percent of the respondents reported decreased investment in equipment and buildings from a year ago, compared with only 11 percent that reported increased spending.