Corn, wheat and soybean growers across the Upper Midwest produced record or near-record crop yields this year, according to the latest survey of agricultural lenders by the Federal Reserve Bank of Minneapolis, but that’s not leading to much optimism among farmers.

Joe Mahon, regional outreach director at the Minneapolis Fed, was hoping for better news when reviewing the third-quarter survey results.

“The productivity of what you can produce on an acre was actually a record in Minnesota and the other states in the region for things like corn and soybeans,” Mahon said. “Given that, it’s a little bit surprising that the attitude was as pessimistic as it was.”

The reason is that crop prices are down and farm incomes have plummeted in the quarter, according to the data.

The Ag Credit Survey polled lenders in the Fed’s 9th District, which includes Minnesota and the Dakotas. Nearly 80 percent of respondents said farm incomes had decreased since last year, and even more said they expect incomes to decline next quarter. 

Despite record or near-record yields of corn, wheat, and soybeans, these crop prices have been in a slump since the year’s start.

Competing markets like South America also saw high yields in crops such as soybeans, leading to an oversupply, which drove prices down. Additionally, China, Minnesota’s leading soybean buyer, temporarily boycotted the crop during a trade dispute with the United States.

“It’s certainly fair to say that the amount of uncertainty this year is higher,” Mahon said. “Both in terms of what’s going to happen with trade policy and the price environment.” 

The bad news 

“We’re on more than two years now, going on almost three years of declining farm incomes,” Mahon said. 

The continuous decline in farm income has driven up loan demand, according to the lenders surveyed. And with less cash flowing into farmers’ pockets, they’re making only minimum payments on their loans more often, leading to a lower repayment rate. 

The cash-strapped situation farmers face has driven some to file for bankruptcy. And according to Mahon, those bankruptcies are expected to keep growing.

“Land values are really high (and) in an interesting way, that actually is sort of a force that might push bankruptcy filings up,” he said.

Chapter 12 Bankruptcy filings allow farmers to write off capital gains on high-ticket items, such as land. 

“The reason that was created in the first place was to allow farmers to stay in business and continue operating,” Mahon said. “And not have to sell a farm and exit the business of farming completely.” 

Government programs and services are also expected to play a greater role in improving farmers’ finances. In fact, the USDA expects farm incomes nationally to increase.

“A lot of that increase is actually coming in the form of government payments,” Mahon said. “So, they’re expecting greater utilization of government supports to be a big source of security for farm households in the region.”

The good news

Farm safety net programs aren’t the only way farmers could see some relief. While land values continue to climb steadily, cash rents have actually gone down slightly. 

It’s good timing for the many producers who tend to negotiate land rental payments near the end of the year, when contracts typically expire.

“If you’re a farmer who farms all the land that you own and then rents nearby acres from an older, retired farmer,” Mahon said. “[Then] rent going down in the short term is actually a good thing for you, right?” 

The Federal Reserve also cut interest rates several times this year, which could lower monthly loan payments for agricultural producers. Lowering those costs would be welcome as other input costs continue to rise.

“They’re still paying more for fuel, for fertilizer, for insecticide and pesticides and a lot of other inputs to farming,” Mahon said. 

While for the most part, farmers face a gloomy economic outlook, Mahon said people shouldn’t lose sight of the bigger picture.

“Market conditions aside, it was a really great year for farming in Minnesota and in the region,” he said. “(A) really strong harvest that cuts both ways.”

It’s true, he said, that more supply puts downward pressure on prices. 

“But even if the price per bushel is lower than it was a few years ago,” Mahon said. “There’s a lot more bushels to sell, and so, that’s actually a source of relief.”

Published Date: November 16, 2025