USDA Says US Farm Debt Hit a Record $605 Billion. Research Suggests That's Roughly Half the Story.

USDA's Economic Research Service projects 2026 farm-sector debt at a record $605.1 billion — the first time the headline has crossed $600 billion. Real-estate debt accounts for $399.0 billion, non-real-estate debt for $206.1 billion, and the sector's debt-to-asset ratio ticks up to 13.54% from 13.34% in 2025, signaling modest but persistent erosion of solvency. The September 2026 update lowered the figure from a February estimate of $624.7 billion, but the structural call is unchanged: debt keeps outrunning equity growth.

The undercount begins with the survey that builds the most elastic bucket. USDA's own documentation explains that \"individuals and others\" — the lender category that includes equipment dealers, implement-financing corporations, input suppliers, co-operatives, credit unions, and credit cards — is \"estimated using data from the Agricultural Resource Management Survey (ARMS).\" That same survey's response rate has collapsed: Reuters reported ARMS response rates fell from roughly 68% in 2009 to nearly 33% in 2025, with USDA now funding new research projects aimed at closing the gap over the next two years.

The cleanest piece of evidence on the gap is a 2024 peer-reviewed study analyzing 4.4 million equipment liens filed across 14 farm states from 2001 to 2019. Reuters reported its key finding: equipment debt held by non-traditional lenders was as much as four times larger than what USDA's data shows. The \"individuals and others\" line in USDA's balance sheet — which captures implement dealers, financing corporations and supplier credit — was pegged at only $45 billion in 2025.

The visible debt sits with a narrow set of institutional lenders. Commercial banks and the Farm Credit System together hold about 80% of farm real-estate debt, and each holds roughly 41–42% of total farm debt, leaving little room for an undercount without distorting the headline. The pressure that has surfaced so far is differentiated rather than uniform.

Where the undercount becomes a profit statement is at the captive-finance arms of the equipment makers — entities that operate outside USDA's institutional lender frame and aren't aggregated in the $605 billion headline. CNH Industrial's U.S. ag receivables past due30+ days climbed from 3.5% in March 2026 to 4.4% as of June 30, 2026, up from 3.9% a year earlier. Deere's John Deere Capital Corporation reported ag & turf write-offs of $91.6 million for the six months ended May 3, 2026, nearly double the $48.0 million for the comparable2025 period, even as new-equipment sales posted a strong quarter on equipment-operations margin of 14.4%.

Downstream of the farmer, the inputs complex and rural lenders face the same cash-flow squeeze with a lag. Nutrien posted $1.22 billion in net earnings for Q2 2026 on $4.14B of industrial-activities revenue, but Reuters reported volumes missed on softer-than-expected demand and the 2026 guidance range tightened to flat year-over-year ag net sales with 5.0–5.5% EBIT margins. CF Industries and Mosaic — both levered to U.S. nitrogen and phosphate application rates — face the same farmer spending constraint that pulled CNH Industrial ag receivables past due to 4.4%.

The next twelve months will reveal whether the undercount widens or closes. Two collateral cushions and one statistical fix are doing the heavy lifting today. Farmer Mac's national Farmland Price Index registered $8,415 per acre in Q2 2026, up roughly 5% YoY, while USDA's 2026 land values survey puts the average U.S. farm-real-estate value at $4,500/acre, up 3.4%. As long as land keeps appreciating, equity absorbs the debt build — but a 5% pullback in farmland values would wipe out the entire $9.1 billion inflation-adjusted drop in net farm income projected for 2026.