Farm financial numbers appear surprisingly calm, whether gathered by the American Bankers Association, the federal government or a land-grant institution.
- Income is up.
- Grain prices rallied nicely, and surprisingly, at harvest.
- Yields in corn country are generally good, and though drought devastated some areas, others were comfortably high.
But like swans paddling furiously below the pond surface, the calm is deceiving. The underside of those numbers is keeping farmers and their bankers up at night.
“I think it feels worse than it is at this point,” said Nate Franzén, president of the ag banking division at First Dakota National Bank, and the 2026 recipient of the Bruning Award.
“It could mean we’re feeling what’s coming,” Franzén said. “We’re feeling it, but we’re just not seeing the numbers yet.”
Franzén pointed to two decades of portfolio data to back up his read on the calm. “Eighty percent of our customers made money last year,” he said, adding that across 20 years of data, “80% is a pretty good number.” The all-time high is 93%, he said, noting that level was hit “in the heart of the supercycle when we had the ethanol boom going on.”
Franzen’s bank is showing higher income numbers than the 2026 Ag Lenders Survey, conducted by the American Bankers Association, showed. ABA is reporting 60% profitability; part of that likely is from what economists refer to as a “bifurcated” ag economy, essentially pointing to a largely profitable livestock sector and struggling row crop numbers.
The concern on the grain side is in liquidity and working capital.
“All roads lead back to liquidity,” said Bell Bank’s Lynn Paulson, who appeared on this week’s episode of Ag Marketing IQ In Depth.
Profitable operations typically build working capital that helps them weather downturns. Producers short on liquidity face limited options — refinancing real estate, shifting debt, or, in worst cases, liquidating assets. With four years in which government payments propped up losing row crop production budgets, reliance on ad hoc allocations can be financially dangerous.
“Can we depend on that?” Franzén asked. “That creates some angst and some uncertainty.”
Paulson put numbers to that angst: With $55 billion distributed last year, many producers in his bank’s portfolio saw their entire profit tied to government payments. “Is it reasonable to expect that to continue?” he asked.
Talk to your banker early
Both bankers urge producers to be proactive rather than wait for the numbers to catch up with the feeling.
“Sharpen your saw, so to speak, and be on your A game,” Franzén said, urging operators to stress-test their finances against a scenario without government payments and to scrutinize whether debt payments can be made without government support.
Paulson urged farmers to own their numbers, to treat their financials as more than a once-a-year exercise for the bank.
Real improvement, he said, comes from accumulating small gains — such as better marketing, custom work, off-farm income — rather than one big fix.
Franzén’s bottom line is not unique: Focus on what can be controlled. Weather, geopolitics and Congress are beyond a farmer’s control. “But you can bolster your position, prepare for bumps,” he said. “And I think that’s a smart thing to be doing today.”
That starts with transparent conversations between farmers and lenders. Consider all aspects of a plan, and then stress-test it.
“If the year doesn’t turn out, this is what my plan B is,” Paulson said. “In doing that, you make sure you can get to that next upturn that invariably is going to come, right? Is it going to come in one year, two years? I don’t know, but it’s going to come. And you want to be in the game when that happens.”
Hear more from Paulson on this week’s episode of Ag Marketing IQ In Depth.