Farm Credit Administration summarizes ag economy during "an uncertain tariff environment"
- Jeff Ishee
- Jun 13
- 2 min read
Source: Farm Credit Administration
Washington, DC -- Economic growth appears to be moderating by about a half percentage point from earlier expectations this year. This is due in part to consumers and businesses adjusting to the effects of an uncertain tariff environment.
Favorable indicators show the unemployment rate holding near 4%, and the May Consumer Price Index rising only slightly month-over-month. Potential signs of economic weakness include rising consumer loan delinquencies and bankruptcy filings.

Crop conditions remain favorable overall throughout the U.S., although severe weather has created challenging conditions for some producers. Weak or negative returns for the third consecutive year have put significant strain on producers of major crops.
For the livestock and poultry sectors, producer margins are generally positive. While Highly Pathogenic Avian Influenza (HPAI) cases have slowed in the U.S., an outbreak of the bird flu in Brazil--the world's second largest chicken producer--is creating opportunities for increased U.S. broiler exports.
Cattle prices remain at record-high levels; however, livestock by-product prices have declined recently because of China's retaliatory tariffs. Low cattle inventory is being offset by higher beef yields per head, keeping beef production relatively level. Farm asset prices have softened recently. For example, Iowa farm real estate prices for medium- and low-quality land have declined, and farm equipment cash values have also fallen.
The System reported sound financial results for the period that ended on March 31, including steady earnings and increased capital levels. At quarter end, total capital equaled $80.6 billion, up 8.0% year-over-year.
Portfolio loan quality remained sound; however, credit risk measures increased as producers in certain agricultural sectors continued to be challenged by difficult operating conditions. Nonperforming assets as a percent of loans outstanding and other property owned increased to 0.96%, compared with 0.56% a year earlier.
Overall, the System is well positioned to meet the funding and liquidity needs of U.S. farmers and ranchers.
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