Higher Input Costs Pressure Farmers in Minneapolis Fed District

(MINNEAPOLIS, MN) — Farmers were already in a difficult situation heading into 2026 due to low crop prices; then came the war in the Persian Gulf and a surge in input costs. “Small grain-only operators have been stressed,” said a North Dakota lender, “and the price of fertilizer and fuel will stress them even more.”

Farm incomes and spending decreased over the first three months of this year, according to agricultural lenders responding to the Federal Reserve Bank of Minneapolis’ Ag Credit Survey conducted in April and covering first-quarter activity. Interest rates on most categories of farm loans increased slightly, while demand for credit increased. Loan renewals and extensions also increased on balance, while rates of loan repayment declined. Farmland values were roughly flat on average from a year earlier across the Federal Reserve’s Ninth District, and cash rents fell slightly. The outlook for the beginning of this year’s growing season was pessimistic, as respondents expected further declines in farm incomes and spending.

The Minneapolis Fed serves the six states of the Ninth Federal Reserve District: Minnesota, Montana, North Dakota, South Dakota, 26 counties in northwestern Wisconsin, and the Upper Peninsula of Michigan.

SOURCE: Minneapolis Federal Reserve

***AUDIO*** Joe Mahon, Regional Outreach Director for the Minneapolis Federal Reserve, joined Jesse Allen on the Friday, May 22nd, 2026 episode of Agriculture of America to discuss the first quarter survey results.