Payday came. A third of it was from the government.

Payday came around.

The number at the bottom looked normal. Then I read the stub. A third of the money hadn't come from my employer at all. It came from the government.

I'd take it. Anyone would.

But I'd think about it at night. I'd wonder what happens the year the check doesn't come.

That is the American farm sector right now.

The Agriculture Department expects farmers and ranchers to make $153.4 billion in profit this year. The number looks steady. It sits about a billion dollars below last year.

So farming looks fine. It isn't.

Of that profit, $44.3 billion is direct payments from Washington. That is close to twenty-nine cents of every dollar.

Strip the payments out and profit falls to $109.1 billion.

Two years ago those payments came to $9.3 billion.

So the money American farms earn from selling food has been shrinking. Washington has been covering the difference. More of it every year.

I find that interesting for one reason. A crop is a crop. A payment is a decision.

Decisions change. They change with elections, budget fights and farm bills.

Meanwhile the debt underneath all of it keeps growing. That is the part we've been tracking.

Government checks pay this year's bills. They don't pay off the loan.

The Agriculture Department forecasts total farm sector debt of $624.7 billion in 2026. That is a record, and it is up 5.2% in a single year. Real estate accounts for $404.3 billion of it. Everything else comes to $220.4 billion.

Interest costs a record $33 billion this year. Roughly $90 million a day, before a seed goes in the ground.

But look at what the borrowing buys.

The Kansas City Fed counted nearly 40% more new operating loans opened in the fourth quarter of 2025 than a year before. Across 2025 the average operating loan ran 30% larger, with three extra months to repay it.

Operating loans buy seed, fuel and fertilizer. They are not an investment in the farm. They are a way to reach harvest.

So the cushion thins. Working capital falls from $154.9 billion last year to $140.6 billion this year. Debt against assets rises from 13.49% to 13.75%.

Neither number is a crisis. Both move the same direction.

And here's where it spreads.

The Farm Credit System is a government-sponsored network of lending cooperatives, set up by Congress in 1916. It holds more American farm debt than the commercial banks do. At the end of March it had $459.2 billion of loans out.

Its own quarterly filings tell the story.

At the end of 2023, 0.40% of its loans sat on nonaccrual. That means the borrower had slipped far enough behind that the lender stopped booking the interest. By March 31 this year the figure was 0.99%.

In dollars, nonperforming loans went from $1.74 billion at the end of 2023 to $4.91 billion in the first quarter.

So the System set more money aside. Its provision for credit losses more than doubled in 2025, to $1.23 billion, from $614 million two years earlier.

But it did not keep pace. At the end of 2023 the loan loss allowance covered 101% of nonaccrual loans. Now it covers 53%.

One more line from the filing. On March 31, 46% of those nonaccrual loans were still current on principal and interest. Three months earlier it was 52.1%.

Those are borrowers who are still paying. The lender has decided it doesn't expect them to finish.

Meanwhile, the courts keep a count.

Chapter 12 is the chapter Congress wrote in 1986 for family farms. It lets a farm restructure instead of being sold off.

In 2023 there were 139 filings. In 2024 there were 216. Last year there were 315, the most since 2020. Through the first four months of this year, Epiq counted at least 158 more.

The stress is regional. Arkansas led the country in 2025 with 33 filings, the most in that state this century. Georgia had 27, up 145%.

Both states grow rice and southern row crops, which have drawn less emergency support than corn and soybeans. The Farm Bureau expects rice growers to lose more than $200 an acre this year. That is after the supplemental payments arrive.

A farm can lose money on every acre and still be counted inside a profitable sector.

Filings lag. They record what already happened, months after it happened. So this is the news from last winter, arriving now.

Three more things worth keeping track of.

Fertilizer got expensive again, and not because of the weather. The World Bank's April commodity outlook recorded urea rising 53.7% in a single month, to $725.60 a tonne in March, the highest in four years. Shipping trouble in the Strait of Hormuz took roughly a third of globally traded fertilizer volumes off the market. Potash was running about 17% above a year earlier. The bank warned that prices could climb more than 30% across 2026 if the disruption holds.

Soybeans are the country's biggest export crop, and the order book is thin. As of June 18, 2.24 million tonnes had been sold for the 2026/27 marketing year to all destinations. Allendale's Rich Nelson put that at 5% of the Agriculture Department's full-year target, and the fifth worst start in twenty-five years. Over the first five months of 2026, Brazil supplied more than 60% of China's soybean imports. The United States supplied 23%.

The people who lend against farmland do not believe the price. The Chicago Fed surveys agricultural lenders across Iowa, Illinois, Indiana, Wisconsin and Michigan. In the May survey, 56% called district farmland overvalued and 1% called it undervalued. Values for good farmland slipped 1% in the first quarter, even though they were up 3% on the year, and cash rents fell 3%, a second straight annual decline. We'll see.

In 1987 the United States rescued its farm banks. Almost nobody remembers it.

The Farm Credit System is a network of lending cooperatives Congress created in 1916. It lends to farmers, ranchers and rural utilities. In the 1970s its loan book passed $80 billion.

Those were good years. Soviet grain shortages lifted exports. Inflation lifted crop prices. Land prices followed. Farmers borrowed against the land to buy more land.

Then the Federal Reserve tightened in 1979. Rates rose. Foreign demand fell as Europe and the developing world grew more of their own food. Farmland prices went the other way. Adjusted for inflation, they returned to where they had been fifteen years earlier.

Watch what the regulator said while it happened. Its reports described a healthy system in 1982, the year land prices peaked. By 1984 they described financial stress. By 1985 they asked Congress for taxpayer money.

Three years, start to finish. The System lost $2.7 billion in 1985 alone, and $4.6 billion of its own capital between 1984 and 1987.

Before the rescue it was allowed to defer its loan loss provisions and to defer recognizing interest expense on some of its high-coupon bonds. That is accounting, not repair. The savings and loans were doing the same thing in the same decade.

Congress wrote that federal assistance had become inevitable. Then it committed $4 billion.

The Agricultural Credit Act of 1987 became law on January 6, 1988. Up to $4 billion of federal assistance, including up to $2.8 billion of Treasury-guaranteed bonds. The System shrank from 404 lending institutions at the end of 1987 to 185.

That System still exists. It is far bigger now.

At the end of June it had $480.6 billion of bonds outstanding, which by its own count makes it the second largest government-sponsored borrower in the country. Those bonds are unsecured. The offering documents state that they are not obligations of the United States government and are not guaranteed by it.

Behind them sits an insurance fund of $8.5 billion. That is under two cents for every dollar of insured debt. The fund has never been used to pay interest or principal on those bonds.

Investors buy the paper anyway. It carries Aa1 from Moody's and AA+ from S&P and Fitch, which is what you get for debt that was rescued once before.

A promise nobody wrote down is still a promise.

Until it isn't. We'll see.