Financial resilience among U.S. crop producers is eroding. Using operating profit margin and debt-to-asset ratio as indicators, the latest FINBIN data pinpoint those most at risk in the 2024-26 downturn-including inexperienced operators, highly leveraged farms, and those predominantly leasing land.

Between 2019 and 2023, crop farms averaged a 19.5% operating profit margin. Profitability peaked in 2021 (29.3%) and held firm in 2022 (27.9%), before falling to 7.5% in 2023 and a razor-thin 1.8% in 2024. In 2024, 55% of crop farms posted negative margins, while only 9% exceeded a 20% margin.

Farms run by less experienced operators (under 10 years) and those with debt-to-asset ratios above 60%-comprising about 10.1% of all crop farms-averaged just 2.7% operating margins in 2024, with nearly 48% slipping into negative territory.

From 2019-23, average crop farm debt-to-asset ratios hovered at 30%, rising to 32% in 2024. Notably, around 20% of farms surpassed the 60% debt threshold, with 15.8% between 60-80% and 3.9% above 80%. Inexperienced operators with higher debt averaged a 77% debt-to-asset ratio, compared with a 55% average for inexperienced farms overall-a clear indicator of added vulnerability.

In 2024, about 56% of farms with debt above 60% also had negative operating margins, representing roughly 11% of crop farms. For those managed by less experienced operators, 48% had debt over 60%, and 47% had negative margins. This means approximately 4-6% of crop farms were financially stressed in 2024, defined as having negative operating margins and debt-to-asset ratios above 60%. As projections for 2025 and 2026 remain bleak, that share is expected to rise significantly.

Operators combining low profitability and high leverage-especially inexperienced ones or those reliant on leased land-face the steepest challenges. Leased acreage often results in lower land equity, limiting collateral value to machinery and buildings, which depreciate swiftly. That, in turn, undermines refinancing capacity, increasing vulnerability amid prolonged low net returns.

These insights set a critical baseline for tracking financial stress among crop producers in the years to come. The key takeaway: vigilant financial monitoring, strategic de-leveraging, and enhanced support mechanisms (e.g., tailored credit terms or risk mitigation tools) are essential to weather persistent downturns.