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Farm machinery interest at an all-time high, continues to squeeze profit margins

An ag economist says tighter margins have made it more difficult for farmers to pay off equipment debt. 

David Widmar with Agricultural Economic Insights says farm machinery interest rates have hit an all-time high.

“Almost $160 of interest expense is going to be accumulated over the life of a $1,000 worth of farm machinery debt,” he says. “If you go back to 2020 or 2021, it was about half of that.”

He tells Brownfield the average loan payment rate has also grown. 

“In the 1980s, when we had double digit interest rates, the average loan was less than a year for farm machinery,” he says. “Now, it takes about 45 months for producers to repay a machinery loan.”

Widmar says farmers should keep a close eye on their balance sheets heading into 2026 and consider delaying large equipment purchases.

AUDIO: David Widmar, AEI