1 

Annual Report to Congress 

Regarding

Term Limits on Direct Operating Loans

As

Required by

Section 5104 of the Agricultural Act of 2014 

February 2023 

USDA/Farm Production and Conservation Business Center,

Economic and Policy Analysis Division

in collaboration with the Farm Service Agency
2 

Foreword

Zach Ducheneaux, Administrator

Farm Service Agency

Term limits impose a statutory maximum on the number of years a producer may receive Farm 

Service Agency (FSA) direct farm ownership and operating loans. The initial statutory language 

and its subsequent revisions reflect the intent of Congress for FSA to serve as a temporary source 

of credit for producers unable to secure commercial credit “sufficient to meet their actual needs, 

at reasonable rates and terms...” However, term limits may have instead further supported 

barriers to, or resulted in adverse impacts on, small and mid-sized farms, producers of certain 

commodities, and those in certain geographic regions. 

Originally implemented with the enactment of the Agricultural Credit Improvement Act of 1992, 

and linked to a requirement that the Secretary establish a plan to encourage direct and guaranteed 

borrowers to graduate to commercial credit, Congress has amended the statute on multiple 

occasions. When initially enacted, the statute generally prohibited FSA from making operating 

loans to a borrower after the tenth year in which they received a loan, or after the 15th year in 

which a loan was made or guaranteed. 

The Federal Agricultural Improvement and Reform Act of 1996 provided additional updates as it 

revised operating term limits to generally limit loans to producers who received a previous direct 

operating loan in 6 or fewer years. The 1996 Act also established term limits for direct farm 

ownership loans, generally limiting loans to producers who had received a direct farm ownership 

loan not more than 10 years before the new loan is made. The 1996 Act also retained guaranteed 

operating loan term limits established in the 1992 Act with certain exceptions.

The Agricultural Act of 2014 subsequently established the requirement for this annual report to 

Congress and eliminated term limits for guaranteed operating loans. 

As reflected by this report, time has shown that term limits are not needed to effectively manage 

a direct borrower’s transition to commercial credit as most borrowers do not reach term limits. 

Indeed, an important data point is the financial strength of borrowers that take full advantage of 

FSA loan programs. An even longer loan period would increase producer benefits. Those 

reaching term limits, on average, have larger total assets, higher gross and net income levels, and 

higher net worth; in other words, borrowers better able to weather economic uncertainty on their 

own terms. 

Term limits are disproportionately borne by certain segments of the industry. Only 9,934 of the 

117,867 borrowers who have received a direct operating loan have met the term limit since its 

inception in 1993. While the overall impact has been minimal, the impact on certain categories 

of producers has been more significant. Sixty-eight percent of operating loan borrowers who 

reach the term limit operate small- or medium-sized farms. Moreover, 40 percent of termlimited borrowers reside in six states and just 10 of the 435 Congressional Districts account onethird of term-limited borrowers. About 40 percent of term-limited borrowers specialize in row 

crops in 2021 and rely on annual operating loans to maintain their operations. 
3 

It is clear that the FSA portfolio serves those that are “too risky” for commercial credit. FSA 

further succeeds in growing generations of borrowers through the largest capital acquisitions 

they will ever make—real estate and production assets. As this report is reviewed to consider 

how can we support and strengthen agriculture, the data show that only 3.8 percent of nonbeginning farmers (and 2.8 percent of beginning farmers) graduate to commercial credit each 

year. USDA hopes this report will provide the necessary information for Congress to consider 

regarding term limits in future farm bills.
4 

Executive Summary

Background 

Term limits impose a statutory maximum on the number of years a farmer may receive a FSA

direct operating loan (DOL). The statute addressing term limits stipulates that a borrower is only 

eligible to receive a DOL if they have received a DOL in 6 or fewer calendar years. The years 

need not be consecutive and multiple loans received during the year count only against 1 year of 

loan eligibility. In practice, the eligible applicant has the flexibility to receive additional DOL 

funding in the 7th year (see handbook 3-FLP). The limitation does not apply to beginning 

farmers through their first 10 years of farming. Waivers that allow an additional 2 years of 

eligibility may be provided to non-beginning farmers on a case-by-case basis if the borrowers 

continue to meet all eligibility criteria. Youth loans and microloans to beginning farmers and 

veterans are exempt and do not count against the limitation. 

Overall Impacts

DOL borrowers largely do not reach term limits, in part because DOLs are a temporary credit 

source. Further, term limits had a small impact on producers within the 2020 and 2021 calendar 

years. In 2021, the rebounding farm economy, increased USDA and other federal support to 

assist producers, and rising commodity prices led to a greater availability of credit, allowing 

many producers to be more reliant on commercial credit or finance operations through other 

means. This resulted in an overall decline in the demand for direct and guaranteed farm loans, 

with the exception of direct farm ownership (DFO) loans. Loan balances and default rates have 

also fallen for DOLs. 

While representing 19 percent of FSA borrowers, socially disadvantaged (race and ethnicity 

only) borrowers represent 13.4 percent of those reaching the term limit (and who thus confront 

higher interest rates once they are no longer in the DOL program). Those reaching term limits, 

on average, have larger total assets, higher gross and net income levels, and higher net worths 

than those who do not reach term limits. While the greater net worth and higher net incomes of 

term-limited borrowers may infer that DOLs help build financial stability, alternatively, larger 

producers appear more likely to take advantage of the program. More research is needed to 

identify the specific factors underlying borrowers’ long-term dependence on DOLs and the 

contribution of DOLs to borrower wealth. 

For 2020 and 2021, key findings are: 

In calendar years 2020 and 2021, an additional 1,492 farm businesses reached the DOL term 

limit. This includes 814 farm businesses in 2020 and 678 in 2021 and brings the total number of 

farm borrowers reaching term limits since their inception in 1993 to 9,934. 

Term-limited borrowers represented a small portion of total DOL borrowers. Through the end 

of 2021, a total of 117,867 borrowers had received a DOL loan that was subject to term limits. 

Only 8.4 percent of these borrowers had reached the maximum number of borrowing years by 

the end of 2021. Most borrowers used less than three years of their eligibility: 48 percent
5 

received a DOL in only 1 year and over 80 percent were recipients of DOLs for 3 or fewer years. 

In contrast, less than 9 percent of DOL borrowers used more than 6 years of DOL loan 

eligibility.

While term limited borrowers may not have exited farming, they still may have suffered from a 

lack of access to credit. Seventy-nine percent of all farm borrowers and over 85 percent of 

living farm borrowers who have reached term limits since their implementation in 19931 were 

still active in farming in 2021, as indicated by eligibility to vote in the most recent county office 

committee elections. Further, only 8.4 percent of the 117,867 borrowers who have received a 

direct operating loan have met the term limit since 1993. 

Borrowers reaching the term limit have a slightly higher average net income in 2021 than 

other DOL borrowers. The average net income for term limited DOL borrowers is $88,696, 

compared with $84,790 for all DOL borrowers obtaining a new loan in 2021—a 4.6 percent 

difference. Debt-to-asset ratios and liquidity ratios were well within the acceptable ranges for 

both sets of borrowers. Further, borrowers reaching term limits tended to operate farms that are

larger in terms of asset levels and annual sales than the average DOL borrower. 

Term limits have traditionally had a greater impact on crop farms and a smaller impact on 

poultry, beef cattle, and other livestock farms. While 24 percent of DOL borrowers were row 

and specialty crop farms, they were 44 percent of all term-limited farms. On the other hand, only 

11 percent of term limited farms were poultry and other livestock or beef cattle, compared to 29 

percent of all DOL borrowers.

Term limits have the greatest impact on medium- and small-sized farms. Sixty-eight percent of 

term limited borrowers operated small- or medium-sized farms, compared to 46 percent of all 

DOL borrowers. 

Term limits have the greatest impact in the Northern Plains, Appalachia, Corn Belt and Lake 

States regions. Combined, these regions represented 49 percent of all DOL borrowers and 60 

percent of all term-limited borrowers at the end of 2021. 

Socially Disadvantaged (SDA) and other underserved producers are less likely to take full 

advantage of the term limit. Those that reach the term limit typically identify as non-veteran, 

white, and solo male operator. 

Moving Forward 

Changing farm economic conditions are likely to influence DOL demand. Rising input costs 

and supply chain disruptions may lead to tighter profit margins in the upcoming years. These 

factors, in addition to rising land rental rates and the potential for a reduction in the past year’s 

level of government payments, may reduce working capital levels and lead farmers to rely more 

heavily on credit to finance annual production expenditures. Higher interest rates for 

commercial loans may also increase the demand for FSA loans. These factors may reduce the 

1 Since 1993, slightly less than 8 percent of term limited borrowers were deceased.
6 

ability of borrowers to have their actual needs met from commercial credit sources and increase 

demand for DOLs. 

Policy Considerations

The U.S. Department of Agriculture (USDA) plans to continue analyzing the farm loan portfolio 

with an eye towards the “actual needs” of borrowers and providing reasonable rates and terms. 

USDA plans to focus on the demand for, and access to, DOLs for mid-sized farms, crop farms,

and those located in credit deserts, in light of constantly changing farm economic and financial 

conditions. In the meantime, this report provides the data and information for review and 

analysis of term limit requirements, which stakeholders and decision makers alike are 

encouraged to use when considering policy alternatives to the current requirement. Note that the 

Administration is requesting elimination of the cap on the number of times that a borrower can 

get a direct operating loan in the Explanatory Notes to the FY 2024 President's Budget. 
7

Introduction

Section 5104 of the Agricultural Act of 2014 amended Section 311 of the Consolidated Farm and 

Rural Development Act (ConAct) to require an annual report on term limits for direct operating 

loans. As directed by the statute, this annual report estimates the number and location of current 

and past direct borrowers who have reached their term limits, and their structural, demographic, 

and financial characteristics. Economic impacts on farm borrowers who have reached their term 

limits are also examined, as well as potential impacts on future borrowers. The report also 

addresses how expected farm economic conditions may affect the future demand and role of FSA 

direct loan programs. 

Term limits impose a statutory limit on the number of years that a farm borrower may receive 

loan funds through programs administered by USDA.2

 DOLs were established under Section 

311 l(c)(2) of the ConAct for qualified farmers. Term limits of 7 years were initially enacted for 

both direct and guaranteed FO and OL programs by the Agricultural Credit Improvement Act of 

1992.3

 Term limits have never applied to emergency loan (EM) borrowers. 

The 2014 farm bill exempted all guaranteed loans from any term limits. DOL microloans made 

to veterans and beginning farmers are also exempt from term limits. Further, the limitation does 

not apply if the borrower's farm is subject to the jurisdiction of an Indian tribe. FSA can 

obligate, in certain circumstances, DOLs to borrowers beyond their term limit. For example, 

waivers are granted to qualified beginning farmers through their 10th year of farming. 

Non-beginning farmers who have reached the term limit may receive a 2-year waiver, provided 

the operation is viable, the borrower has or will complete financial training, and commercial 

credit is unavailable. 

Term limits were enacted to ensure FSA's role as a temporary credit source during a period when 

community banks and relational lending was the norm. By limiting the total years of DOL 

eligibility, borrowers are pushed to pursue credit from commercial lenders after year seven at 

terms that are less favorable than they receive under the DOL program. There are concerns, 

however, about possible adverse impacts that term limits may have on credit availability. 

Specifically, term limits could adversely affect the Government's ability to serve as a safety net 

should large numbers of farmers become ineligible for assistance as a result of worsening farm 

financial conditions. Adverse impacts could also arise if specific groups and/or regions depend 

on FSA credit. For example, FSA tends to be more important as a source of credit in regions 

more economically distressed such as Appalachia or in credit deserts characterized by a lack of 

commercial lenders. Further, FSA credit programs tend to be more important among groups 

considered socially disadvantaged and among mid-size family farms.

4

 

2 A farm borrower may be an individual, partnership, or legal entity. Term limits apply to both the entity and

underlying individuals who are obligated as co-borrowers. This includes the spouse of married borrowers as well as

legal partners. FSA uses the term 'borrower' to refer to the borrowing individual or entity listed on the

promissory note. The numbers in this analysis focus on the borrowing entity only.

3 The ConAct states that an applicant is eligible for a direct operating loan if the applicant received a DOL in 6 or

fewer years. The regulations (7 CFR 764.252), implemented in 1993, state that an applicant is not eligible if the 

applicant has closed a DOL in 7 or more years. This report considers the term limit to have been reached at the end 

of 6 full years of receiving a DOL. This means that a borrower is at the term limit at the end of the 6th year but 

exceeds it with receipt of any additional DOL

4 See USDA ERS, Hoppe and MacDonald, April 2013 for a discussion of the Economic Research Service’s farm 

typology classification of family farms. 
8

One rationale for term limits is that long-term dependence on FSA credit can lead to economic 

inefficiencies. However, the opposite could be inferred in the data. Another argument is that 

long-term borrowers might monopolize benefits at the expense of young and beginning farmers. 

Specifically, the favorable terms available through FSA direct loans may encourage more 

established borrowers to continue to pursue credit through FSA even though they may qualify for 

commercial credit. However, there are already provisions requiring that applicants be unable to 

obtain commercial credit, and borrowers considered viable for commercial credit to refinance, or 

graduate, their direct loans with a commercial lender. Direct borrowers are expected to 

transition, or graduate, to private sources of credit over time (Section 345 of the ConAct; 7 CFR 

765.101).5 Having more financially stable borrowers in the FSA portfolio for a longer period 

mitigates potential losses and reduces subsidy rates, thereby leveraging annual appropriations. 

Data Sources and Methodology

Data for this report were drawn from FSA farm loan program databases. Current-year loan and 

borrower data were obtained from the Obligation Finder (OBFN) database. Since the data were

reported at the borrower level, a single term-limited borrower may either be an individual, a 

group of individuals, or an organization. Hence, the total number of individuals affected may be 

larger than the number of term-limited borrowers listed. 

Information on overall loan history, balances, and debt settlements was merged from the 

Program Loan Accounting System (PLAS) and the Debt Settlement System databases. In this 

analysis, monthly rather than calendar-year ending PLAS data was used, enabling recognition of 

borrowers who may have paid off their operating loans before the end of the year. Information 

on guaranteed loans and eligibility to vote in county elections was obtained from the Guaranteed 

Loan System (GLS) and County Office Committee (COC) databases. Data enabling 

examination of results across key demographics were obtained and merged from the Service 

Center Information Management System (SCIMS)/ Business Partner databases.

Borrowers were considered term limited if they received a DOL in 6 or more calendar years. 

Multiple loans received in a single year were only counted as one year of term limitedness. 

Likewise, the years did not have to be consecutive, as years of eligibility only included years 

where loans were received. Beginning farmers were identified in the data and not counted as 

term limited until they exceeded their tenth year of farming. Additional categories labeled in the 

data or non-beginning farmers with loans received for more than 7 years indicate waivers and 

other exemptions granted. Socially Disadvantaged borrowers (SDAs) may apply for, and be

granted, a waiver of up to two years. Youth loans and microloans to veterans and beginning 

farmers are exempt.

6

5 The process for evaluating a borrower's potential for graduation to commercial credit is described in Section 4 of 4-

FLP Direct Loan Servicing. 6

 Waivers and exemptions are treated differently. Under a waiver, FSA postpones enforcement of eligibility criteria 

for borrowers who may have reached the term limit. Waivers are not in effect until the borrower has reached the 

term limit. The receipt of a DOL while a borrower is under a waiver is still counted toward the total years of 

eligibility resulting in some borrowers receiving a DOL for 8 or more years. An exemption, on the other hand, 

excludes these associated loans from counting against years of eligibility. The key difference between waivers and 

exemptions is that upon expiration of the waiver, a borrower would be ineligible for further assistance. In contrast, 

exemptions do not expire and have no impact on years of remaining eligibility.
9 

The data used in this report span the 1993 to 2021 time period. All borrowers using more than 

three years of eligibility as of April 4, 1996, were counted as only using four years of eligibility 

due to statutory timing.

7

 

Economic Environment 

Current Farm Economic Conditions Started Improving in mid-2020 

Farm income levels began rising in the summer of 2020 after the COVID-19 pandemic effects 

squeezed the ag sector in the spring, remaining strong through the end of 2020 and the first part 

of 2021. USDA’s ERS forecasts of net farm income increased by $16.3 billion (20.6 percent) in 

2020, following a decline in 2019.8 This is largely attributed to a large increase in government 

payments (from the Coronavirus Food Assistance Program (CFAP) and the Paycheck Protection 

Program (PPP)) and higher crop prices, mostly driven by a recovery in trade as China 

aggressively purchased U.S. farm goods. Government payments in 2020 were the highest since 

2005 and the third highest ever. 

Total farm sector assets increased by $99.5 billion (3.2 percent) in 2020. The largest increases 

were financial assets (5.2 percent) and real estate (3.7 percent).9

 Increases in farm real estate 

values mainly drove the increases in financial assets, rising $20.7 billion (7.7 percent). The 

portion of farm sector asset value held in farm real estate—including land and structures—grew 

0.4 percent to comprise 83.2 percent of the value of total assets at the end of 2020. Total farm 

sector debt rose $21.6 billion (5.1 percent). 10

Overall Farm Economic Outlook Remained Robust Through 2021 

Net farm income remained strong in 2021 at $119.1 billion, an increase of 25 percent from 2020, 

even though government payments fell by 41 percent. Net farm income in 2021 was 51 percent 

higher than its $79.1 billion 2015-2020 average.11 Strong net farm income in 2021 reflected 

higher commodity prices and generally favorable growing conditions in the Midwest. Cash 

receipts increased $68.8 billion in 2021, with crop receipts increasing $37.9 billion and 

animal/livestock product receipts increasing $30.9 billion.12 The greatest increases were for 

farm businesses specializing in hogs, poultry and eggs, and corn, while farm businesses 

7

 Until 1994, USDA farm lending was undertaken through the Farmers Home Administration (FmHA) which also 

made loans for rural housing, businesses, and cooperatives. The Department of Agriculture Reorganization Act of 

1994 eliminated FmHA and created the Consolidated Farm Service Agency in October 1994 (later, the Farm Service 

Agency) to whom all farm lending authority was transferred. By 1993, the Federal Credit Reform Act of 1990 had 

been fully enacted requiring Federal credit agencies to collect and retain data on all loans obligated. As a result, 

farm loan data was incomplete prior to 1994. Some borrowers may have had a complete accounting of their loans 

received prior to 1994 while others did not. Hence, in enacting term limits, Congress established that anyone using 

over 3 years of eligibility through April 4, 1996, only be counted as 4 years. 8 Forecasts are from the ERS Farm Sector Income Forecast as of February 2022. Additional detail and calculations 

made using the data on the U.S. Farm Sector Financial Indicators table link from this site. 9 Forecasts are from the ERS Assets, Debts, and Wealth Forecast as of February 2022. Additional detail and 

calculations made using the data on the U.S. Farm Sector Financial Indicators table link from this site. 10 ERS Assets, Debts, and Wealth. 11 ERS Farm Sector Income Forecast. 12 ERS Farm Sector Income Forecast.
10

specializing in cotton, food grains, and feed crops, as well as specialty crops such as fruit and 

vegetables, saw declines in average net farm income in 2021.13

Farm capital investment remained strong in 2021. Farm real estate debts were forecast to rise 4.5 

percent in 2021, while nonreal estate debt was expected to have remained constant, resulting in a 

$13.1 billion (3.0 percent) increase in total farm debt. 14 Assets were forecast to increase 3.0 

percent, leading to a 3.0 percent increase in farm equity levels in 2021, slightly higher than the 

2.9 percent increase in farm equity in 2020.15 High farm incomes and rising land values 

contributed to strong loan repayment rates and lower loan demand on the part of operators 

owning the majority of their operated acres.

Farm sector financial measures—including solvency, liquidity, and profitability—rose in 2021. 

In particular, farms saw significant increases in earnings, net farm income, operating profit 

margin ratios, and nominal rates of return on farm assets. Measures indicating the ability to pay 

debt and interest expenses from current receipts overall increased in 2021. Working capital, the 

amount of cash and convertible assets less short-term debts due to creditors within 12 months,

reached an estimated $92.2 billion in 2021, a 13.5 percent increase from 2020. 16 On the other 

hand, rising input costs, interest payments, and debt levels put downward pressure on operating 

expense ratios, debt service ratios, and real rates of return on assets. 

This situation positively impacted farmers’ financial conditions and agricultural credit markets. 

The Federal Reserve Banks of Kansas City and of Chicago both reported that, through the end of 

2021, farm loan delinquency rates and renewals and extensions of farm real estate loans were 

lower and loan repayment rates were higher than in previous years. For producers in the 

Chicago Federal Reserve Bank District, loans with “major” or “severe” repayment problems as 

of June 2021 (for the second quarter) were at levels not seen since 2014.

17 In the Kansas City,

Chicago, Minneapolis, and Dallas Federal Reserve Districts, lenders reported loan repayment 

rates to be at 10-year highs.

Farm loan demand at agricultural lending banks fell in the first three quarters of 2021 due to 

higher cash farm receipts and continued large government payments. Agricultural loan demand 

at Chicago Federal Reserve District banks in the second quarter of 2021 fell to the lowest level 

recorded since the fourth quarter of 1986.18 Lower loan demand and greater repayment rates led 

to shrinking farm debt bank balances. For example, Kansas City Federal Reserve District banks 

reported that non-real estate and farm debt decreased by 10 percent and 3 percent from 2020.19 

Agricultural lending banks reported a slight uptick in loan demand in the fourth quarter of 2021 

as rising input prices put pressure on producer margins.

With record low agricultural loan interest rates and high farm income levels, total farm capital 

spending rose through 2021 reaching levels not seen since 2011, despite falling farm operating 

and real estate loans at District Banks. More producers appear to have purchased items on a cash 

13 ERS Farm Sector Income Forecast. 14 ERS Farm Sector Income Forecast. 15 ERS Farm Sector Income Forecast. 16 ERS Farm Sector Income Forecast. 17 Federal Reserve Bank of Chicago. Ag Letter, August 2021. 18 Federal Reserve Bank of Chicago. Ag Letter, August 2021. 19 Federal Reserve Bank of Kansas City. Commercial Bank Call Report. June 23,2021.
11

basis or used alternative sources funding, with the Farm Credit System, merchants, dealers, and 

other input suppliers reported making more loans in the first six months of 2021.20 

Rising land values, cash rents, and input costs negatively impacted producers in 2021 

The cattle and livestock sector was negatively affected in 2021 by major drought and 

windstorms, higher feed costs, a cyberattack on meatpacker JBS, and changing weather and 

consumer preferences.

21,22 Lower milk receipts as well as higher feed prices and other input 

costs negatively impacted milk producers, although Dairy Margin Coverage program payments 

rose $0.9 billion in 2021 to help offset losses.23 In addition, many dairy and cattle producers 

received CFAP2 payments in 2021. Finally, additional disaster assistance available via the 

Livestock Indemnity Program (LIP), the Livestock Forage Disaster Program (LFP), and the 

Emergency Assistance to Livestock, Honeybees and Farm-Raised Fish Producers (ELAP) 

program helped cushion some of the negative impact of the drought. Spending for these 

programs was $346 million in 2021, up $65 million from 2020.24 

The Chicago, Minnesota, and Kansas City Federal Reserve Districts saw large overall increases

in land values across most land types.25 26 27 Producers in the 2020 Purdue Land Values and 

Cash Rent Survey and the Iowa State University Farmland Values Survey cited lower farmland 

supply due to both conversion of agricultural land to other uses and fewer producers selling as 

causes for unexpectedly high farmland values in 2020. 28,29 For 2021, the Federal Reserve Bank 

of Chicago stated that land values in the second quarter rose 14 percent from the prior year, the 

largest increase since the third quarter of 2013. All five states in this district—Illinois, Indiana, 

Iowa, Michigan, and Wisconsin—reported double digit gains.30 For all of 2021, farmland values 

in the Chicago and Kansas City Federal Reserve districts were reported up 22 percent and 20 

percent, respectively, relative to a year earlier, while farmland values in the Minneapolis Federal 

Reserve District rose 22 percent between the third and fourth quarter of 2021.31 32 33 The largest 

year over year reported increases were for farmland in Kansas (32 percent), Iowa (30 percent for 

irrigated farmland), and Nebraska (31 percent for non-irrigated farmland). 

Cash rents also rose. Cash rents rose 12 percent in the Minneapolis Federal Reserve district and 

10 percent in the Kansas Federal Reserve district, reaching levels only 15 percent below their 

20 Federal Reserve Bank of Chicago. Ag Letter, August 2021. 21 Federal Reserve Bank of Kansas City. Ag Bulletin. Second Quarter 2021. 22 Federal Reserve Bank of Kansas City. Economic Review. December 2021. 23 ERS Farm Sector Income Forecast. 24 USDA FY2022 Budget Summary. 25 Federal Reserve Bank of Kansas City. Ag Credit Survey. February 2022. 26 Federal Reserve Bank of Minneapolis. Agricultural Credit Condition Survey, November 2021. 27 Federal Reserve Bank of Chicago. Ag Letter. February 2022. 28 Purdue Agricultural Economics Report, 2020. 29 Iowa State University, 2020. 30 Federal Reserve Bank of Chicago. Ag Letter, August 2021. 31 Federal Reserve Bank of Kansas City. Ag Credit Survey. February 2022. 32 Federal Reserve Bank of Minneapolis. Agricultural Credit Condition Survey, November 2021. 33 Federal Reserve Bank of Chicago. Ag Letter. February 2022.
12

historic highs of 2012.

34 35 Most experts expect land values and cash rental rates to continue to 

rise in 2022, putting downward pressure on farmer margins. 

Continued input price increases negatively impacted producers in 2021. ERS estimated that farm 

sector production expenses increased $27.6 billion (11.6 percent) in 2021.36 The largest 

increases were in fuel and oil expenses (32.2 percent), livestock and poultry purchases (16.4 

percent), and feed expenses (14.2 percent). As noted by agricultural lenders in northeast 

Nebraska participating in the Kansas City Federal Reserve’s August 2021 Agricultural Credit 

Survey, increasing costs add constraints to farmer’s working capital and may contribute to 

slowing capital expenditures in 2022.37 

The price of farm equipment rose significantly in 2021 due to supply chain issues, chip 

shortages, and rising steel costs. According to the Chicago Federal Reserve, the cost of a tractor 

in June 2021 was 3 percent higher than in June 2020 and 25 percent higher than in June 2019. 38

Similarly, the average cost of a combine in June 2021 was 4 percent higher than in June 2020 

and 41 percent higher than in June 2019. Nevertheless, cumulative tractor sales from January 

through December were up over 10 percent and combine sales were up more than 24 percent 

from 2020.39 Other input costs, such as repair and maintenance, machine hire and custom work, 

real estate property taxes and fees, net rent to operator landlords, and interest expenses also 

increased more than 6 percent in 2021. 40 These shortages, the rising costs of outlays and inputs, 

and the associated impacts on depreciable expense levels add to the high level of uncertainty, 

further fueled by expectations of increasing inflation. 

Farm income expected to be down in 2022 as higher receipts offset by higher costs41

Cash receipts are expected to continue to increase in 2022 for both crop and livestock producers. 

Crop receipts are forecast to increase $12.0 billion (5.1 percent) in 2022, driven by higher 

receipts for cotton, soybean, corn, and wheat.

42 Livestock product receipts are expected to 

increase $17.4 billion (8.9 percent), driven by higher receipts for dairy, cattle/calves, and 

broilers.

43 Cash receipts for producers focusing on specialty crops and hogs are expected to 

decline. Greater cash farm receipts will be offset by lower government payments and higher 

production expenses. Government payments are forecast to decline $15.5 billion (57 precent) 

from 2021 to $11.7 billion due to lower ad hoc payments, as well as lower Dairy Margin 

Coverage and ARC and PLC payments.

44 As a result, net farm income is forecast to decrease by

34 Federal Reserve Bank of Minneapolis. Agricultural Credit Condition Survey. November 2021. 35 Federal Reserve Bank of Kansas City. Ag Credit Survey. February 2022 36 Forecasts from the ERS Farm Sector Income Forecast as of February 2022. Additional detail and calculations 

made using the data on the U.S. Farm Sector Production Expenses table link from this site. 37 Federal Reserve Bank of Kansas City. Ag Credit Survey. August 2021. 38 Federal Reserve Bank of Chicago. Ag Letter, August 2021. The average price for a combine in June 2021 was 4 

percent higher than in June 2020 and 41 percent higher than in June 2019.

39 Refers to number of tractors and combines, not value. Association of Equipment Manufacturers. 40 ERS Farm Sector Income Forecast. 41 As of the time of this report, there are unpresented risks surrounding the forecasts given the additional stress of the 

war in Ukraine. This conflict could potentially reduce global trade in wheat and other critical crops and lead to more 

price volatility while also reducing the already tight supply of fertilizer given Russia’s major role as an exporter. 42 ERS Farm Sector Income Forecast. 43 ERS Farm Sector Income Forecast. 44 ERS Farm Sector Income Forecast.
13

$5.4 billion (4.5 percent) in 2022 to $113.7 billion.45 This is still significantly above its 2019 

and 2020 values, as well as above the 2001-2020 average. 

However, there is considerable uncertainty in these forecasts. By the end of 2021 and the start of 

2022, fertilizer prices began to spike along with rising natural gas prices. By December 2021, 

the average monthly spot price for natural gas was 45 percent higher than in December 2020, 

leading ERS to forecast annual increases of 235 percent for anhydrous ammonia, 192 percent for 

liquid nitrogen, and 142 percent for liquid nitrogen in 2022.46 These estimated price stresses 

have worsened in the past few months with continued supply chain issues, the conflict in 

Ukraine, and tariffs and import bans disrupting the supply of key inputs.47 A recent study by the 

Texas A&M University Agricultural and Food Policy Center estimated that fertilizer prices will 

increase in excess of 80 percent for the 2022 planting season (relative to 2021).48 

ERS projects the value of farm assets to increase by $42.2 billion (1.3 percent), driven by 

increases in farm real estate values ($26.8 billion) as well as non-farm real estate assets ($15.4 

billion).49 The 1.3 percent increase in farm assets is slightly offset by a 2.9 percent increase in 

farm debt, resulting in an 0.22 increase in the debt-to-asset ratio in 2022, to 14.11 percent. Total 

farm sector equity is expected to increase 1.0 percent ($29.1 billion) in 2022.50

Growth in current debt, a decline in current assets, and rising interest rates is expected to cause 

farm sector measures of liquidity to fall in 2022. Working capital, or the amount available to 

fund operating expenses after paying debts, is expected to decrease by 3.3 percent in 2022.51 

The debt service ratio (the share of production needed to satisfy farm debt) is expected to

increase by 0.01 to 0.24 in 2022.52 Profitability measures are also expected to decline in 2022. 

The rate of return on farm assets is expected to decline from 5.2 percent in 2021 to 3.4 percent in 

2022.53 

Other trends impacting the farm economy in 2022

The ability of certain producers to obtain new loans or service existing loans may be more 

difficult in 2022, given higher input prices, supply shortages, and higher interest rates—as well 

as the potential for ongoing drought in the West and other areas. Potential fertilizer shortages in 

addition to high input prices could affect the majority of farmers. These factors could in 

particular affect the profit margins of financially vulnerable crop and livestock producers and 

increase the need for additional or new DOLs—as well as increase the percentage of borrowers 

reaching term limits in future years. 

In the crop sector, multi-year high prices, including high revenue-insurance-projected price 

guarantees, should help support margins even with rising input costs. On the other hand, with 

45 ERS Farm Sector Income Forecast. 46 ERS, February 2022. 47 Campbell, March 2022, Tomson, January 2022. 48 Texas A&M University, Agricultural and Food Policy Center, January 2022 49 ERS Farm Sector Income Forecast. 50 ERS Farm Sector Income Forecast. 51 ERS Farm Sector Income Forecast. 52 ERS Farm Sector Income Forecast. 53 ERS Farm Sector Income Forecast. 
14

drought and rising costs being a widespread concern in early 2022, those groups served by FSA 

loan programs may need closer monitoring.

Overall Demand for FSA Loans and Credit Quality

From 1993 through 2021, FSA provided 117,867 direct operating loans that were subject to term 

limits to farmers, a slight increase from 111,561 in 2020 (Table 1). Even though the increase in 

the number of borrowers subject to term limits was greater in 2021, total loan applications 

received and obligations were down. 

Despite a slight uptick in 2020, loan applications and obligations have declined for all but direct 

farm ownership loans since 2016 (Figures 1 and 2). The increase in demand for farm ownership 

loans reflects increases in direct loan size limits, as authorized in the 2018 Farm Bill.

54 Rising 

land prices and higher net farm income levels in 2020 and 2021 also played a role in increasing 

loan demand. Increased direct farm ownership (DFO) demand has been contributing to a 

portfolio shift toward real estate lending in the direct program (Figure 3). Both the number of

DFO borrowers and the average DFO balance per borrower has increased consistently since 

2010 (Figures 4 and 5). 

These trends are consistent with commercial bank reports in 2020 and 2021. The Kansas City 

Federal Reserve reported that, following an uptick in loan demand, nonreal estate agricultural 

loans at commercial banks fell 13 percent in the fourth quarter of 2021, dropping to the lowest 

level since 2012. This fall in loan demand was driven by a decline in the number of operating 

loans provided as well as a decline in the average loan amount for borrowers of all sizes. 

Overall, the average size of operating loans in 2021 decreased to its lowest level since 2016. 

This decrease in loan demand was most pronounced for large farms, with banks reporting that 

the volume of loans greater than $100,000 fell nearly 20 percent from a year earlier.

55 

A decline in seasonally adjusted guaranteed defaults per borrower since 2020 indicates a 

relatively healthy borrowing environment for farm lenders. Starting in March of 2020, the share 

of guaranteed borrowers in default declined through most of 2021, despite a slight uptick for 

guaranteed operating loan borrowers at the end of 2021 (Figure 6). In contrast, DOLs showed 

slight increases in seasonally adjusted borrower defaults through much of 2020 and the 

beginning part of 2021. Then, there was an increase in direct borrower defaults starting in March 

2021 and continuing through the rest of the year56 (Figure 7). 

This trend is contrary to what was reported by commercial banks. Commercial banks reported 

that agricultural loan performance continued to improve in 2021. The Federal Reserve Bank of 

Kansas City reported a 30 percent and 40 percent decline in the volume of delinquent farm real 

54 The Agricultural Improvement Act of 2018 (the 2018 Farm Bill) increased direct farm ownership loan size limits 

from $300,000 to $600,000 and the direct operating loan size from $300,000 to $400,000.

55 Federal Reserve Bank of Kansas City. Ag Finance Update. January 2022. 56 The American Rescue Plan Act (ARPA) likely had a significant impact. Between June 2021 and October 2021, a 

total of 24,111 payments amounting to more than $118 million were reversed to calculate payoffs as of January 1, 

2021. These payments were held in suspense and were reapplied between October 2021 and December 2021. 

Borrowers would likely have been reflected as delinquent in systems during the time payments were held in 

suspense.
15

estate loans and farm production loans, respectively,

57 as well as the highest increase in 

repayment rates reported since 2012.58 

The increasing pattern of DOL and GOL delinquency rates, which does not match what is 

reported for commercial banks, illustrates the importance of monitoring the financial health of 

small- and mid-size family farms. Given rising economic uncertainty, these increases may 

indicate increasing financial vulnerability of these groups or changes in FSA’s loan portfolio as a 

result of increases in loan limits or the impacts of debt relief proposed through the American 

Rescue Plan Act (ARPA).59 

According to the Kansas City Federal Reserve, banks in 2021 saw an increase in loan demand by 

small- and mid-sized farms. The number of loans to farms with the smallest farm loan portfolios 

grew 35 percent from a year earlier, while the average size of loans was 30 percent lower.

60 

Many small- and mid-sized family farms tend to be more reliant on FSA credit and are more 

susceptible to lower incomes and rising input costs. A combination of Agricultural Resource 

Management Survey and FSA loan data indicated that, as of December 2017, over 18 percent of 

all medium-sized farms had a direct or guaranteed loan.

61 Small and mid-sized farm borrowers 

are more likely to be impacted by term limits, comprising over two-thirds of term limited 

borrowers as well as those who are nearing term limits (Figure 8). 

Another group to monitor in light of increasing DOL delinquency rates is livestock producers. 

They have been particularly hard hit by drought in the Mountain States, by supply chain issues 

impacting meat processing plants, and higher input costs. According to the Federal Reserve 

Bank of Kansas City, the demand for poultry and livestock loans nearly doubled in the third 

quarter of 2021 compared to the same quarter average over 2010-2019, driven largely by 

increasing average loan sizes.

62 In addition, while most producers reported improving financial 

conditions compared to the beginning of 2020 and had declining delinquency rates, livestock 

producers in this district reported no change in financial positions nor did their delinquency rates 

improve.63 A significant number of cattle producers operate small family farms, which tend to 

be more dependent on FSA credit programs. Also, cattle operations tend to be located in the 

Great Plains and Corn Belt regions, where a greater share of term-limited DOL borrowers reside 

(Figure 9). 

57 Federal Reserve of Kansas City. Commercial Bank Call Report, December 2021. 58 Federal Reserve Bank of Kansas City. Ag Credit Survey. May 2021. 59 “In anticipation of debt forgiveness as authorized by ARPA, some borrowers allowed payments to lapse”. This 

may have resulted in higher-than-average delinquency rates in 2021 for FSA borrowers than would be otherwise. 60 Federal Reserve Bank of Kansas City. Ag Finance Update. January 2022. 61 The most recent ARMS data available to make this calculation are from 2017. See Figure 7 in Ahrendsen, et al. 

(2022). https://doi.org/10.1108/AFR-05-2021-0060. 62 Federal Reserve Bank of Kansas City. Ag Finance Update. October 2021. 63 Federal Reserve Bank of Kansas City. Ag Credit Survey. May 2021. 
16

DOL Term Limits Affect a Small Share of Borrowers 

A borrower64 was determined to have met the term limit at the end of the 6th year in which they 

received the DOL funds.

65 The year in which the term limit was reached was the last year in 

which DOL funds were received, except for beginning farmers who may receive loans while 

they are a beginning farmer or for any of the remaining 7 years when they no longer meet the 

definition of beginning farmer. While a borrower may reach term limits at 6 years, they will not 

exceed the term limit until they receive additional loans in the 7th year. 66 Also, through waivers,

a borrower may have received DOLs in 8 or more years. A total of 814 borrowers reached their 

term limits in 2021 and 678 borrowers reached their term limits in 2020 (Table 2). 

In 2021, term limited borrowers represented less than one percent of all borrowers with an 

outstanding direct loan balance and less than two percent of all borrowers (Table 1 and 2) with 

an outstanding DOL. These figures include 367 borrowers who were considered beginning 

farmers in 2021 (Table 2). Beginning farmers meeting all eligibility criteria receive a waiver of 

term limits and can receive a DOL through their first 10 years of farming. After 10 years of 

farming, they are no longer considered beginning farmers and therefore no longer qualify for this 

waiver.

67 Furthermore, microloans to beginning farmers and veterans as well as youth loans do 

not count against term limits. Microloans and their associated term-limit exemptions were 

implemented in 2014. Since then, about one-fourth of all non-youth DOL loans have fallen into 

this category.

68

The total number of borrower cases reaching term limits is 9,934, or 8.4 percent of all existing

and former borrowers receiving a DOL since 1993 that was subject to term limits (Tables 1 and

2). Of all borrowers with an outstanding direct loan balance in 2021, term limited borrowers 

comprise 4 percent of the current total direct caseload (excluding youth, boll weevil, and 

conservation loans, but including direct loans beyond DOLs) and 7 percent of the current DOL 

caseload (Table 1 and 3). 

64 A borrower represents the entity which is obligating the loan. It can be an individual, partnership, family 

corporation, or LLC. It includes all co-borrowers who may also sign the promissory note. 65 While a borrower may receive loans in the following (7th) year, only about half of those at the 6-year limit use 

their 7th year of eligibility. A likely explanation is that farmers may be saving their last DOL as a risk management 

tool. Considering term limits to have been met at 6 years was judged to provide the most accurate estimate of the 

number of farmers adversely affected.

66 This procedure results in revisions to totals for the last year of eligibility when compared to reports in earlier 

years. For example, a borrower may have met the term limit in 2017 at 6 years and would have counted in the totals 

for that year. But, if they received an additional loan in 2020, estimates beginning with this report and forward will 

reflect this change. 

67 Estimates of the numbers of borrowers reaching term limits in previous years were adjusted to reflect waivers

provided to beginning farmers. In earlier years’ analysis, a beginning farmer was considered to have met the term 

limit in the last year a loan was received. For the 2021 analysis, beginning farmers were considered to have met the 

term limit at the maximum of the last year in which a DOL was received or their last year as a beginning farmer. For 

example, a farmer receiving a DOL in his or her 6th year in 2018 may still have been eligible as a beginning farmer 

through 2019. In this year’s report, the borrower was considered to have met the term limits in 2019 rather than 

2018—the last year they received funds. 68 USDA OFBN database as of December 31, 2021.
17

Most Remain Active FSA Borrowers and in Farming after Reaching Term Limits

Despite being ineligible for further DOLs, the majority of term-limited borrowers participate in 

other FSA credit programs. Thirty-nine percent of borrowers reaching their term limits in 2021 

were active borrowers with an outstanding direct operating, farm ownership, or emergency loan 

during 2021 (Table 3). In particular, 34.6 percent of borrowers reaching term limits through

2021 had an outstanding direct operating loan as of year-end (Table 3). Of those reaching their 

term limits since 2010, 6.6 percent received a farm ownership loan, 2.3 percent received an 

emergency loan and 13.9 percent received a guaranteed loan (Table 2; Table 4). 

Borrowers with DOLs and reaching term limits have remained active in farming, with many 

continuing to be active in other FSA lending programs subsequent to reaching term limits. 

Seventy-nine percent of current and prior borrowers who reached term limits were still active in 

farming at the end of 2021, as indicated by eligibility to vote in county office committee 

elections (Table 5).69 After adjusting for deceased borrowers, 5.4 percent of those that reached 

term limits through 2021 appeared to have exited farming through liquidation of assets—

indicated through debt settlement, guaranteed loss claims, or bankruptcy (Tables 2 and 6). Of 

those reaching term limits between 2010 and 2021, on average, 36 percent paid off their loans by 

the end of 2021 and 49 percent remained active borrowers (with an outstanding balance) into 

2021 (Table 2, Figure 10). As of 2021, 16.9 percent of borrowers had received a restructuring 

of their loan after reaching their term limits (Figure 11). 

DOLs Used Primarily as a Temporary Credit Source

A majority of DOL borrowers use FSA as a temporary source of credit. Forty-eight percent of 

non-exempt DOL borrowers since 1993 received DOL funds for only 1 year (Figure 12). About 

20 percent of non-exempt borrowers received DOL funds in four or more years, while 5 percent 

of all former and current DOL borrowers received a further direct operating loan after year six. 

The number of years in which a borrower relies on FSA direct loans varies by region and 

production specialization. Borrowers located in the Northern Plains had the highest average 

years of loan eligibility used (2.7 years on average), followed by those in the Corn Belt (2.5 

years on average), the Lake States (2.4 years on average), and the Pacific (2.4 years on average)

(Figure 13). This contrasts with those in the Delta region who used, on average, 2.0 years of 

loan eligibility and those in the Southern Plains, who used 2.2 years of loan eligibility (Figure

13). 

These regional differences reflect difference in use of DOLs by production specialty. Borrowers 

specializing in row crops and specialty crops used a greater number of average years of loan 

eligibility, 3.0 and 2.8 years, respectively, when compared to those specializing in poultry and 

other livestock (1.9 years on average) and beef cattle (2.3 years on average) (Figure 14). This 

most likely reflects the greater usage among crop and specialty farms of one-year direct 

69 An eligible voter in an FSA county office committee election includes an individual or legal entity which 

participates or cooperates in any FSA program that is provided for by law. If the 7.8 percent of farm borrowers who 

died since reaching term limits in 1993 are removed from the calculation, the percent of active borrowers 

participating in county office committee elections in 2021 reaches over 85 percent. 
18

operating loans. In addition, this result is most likely correlated with greater debt usage by farms

in the Northern Plains and Corn Belt, where row crops and specialty crops predominate. 

There are also differences in the use of years of eligibility based on farm size. Small farms used 

an average of 3.4 years of loan eligibility, followed by medium-sized farms, using on average 3.2 

years of loan eligibility (Figure 15). In contrast, low sales and large farms used an average of 2.2 

and 2.6 years of loan eligibility, respectively.

70 This reflects the greater reliance of small- and 

mid-sized farms on FSA direct loans compared to larger farms and low sales farming operations. 

These latter operators may have greater access to commercial credit, or higher incomes or 

outside incomes, allowing them greater usage of, and more rapid transition to, guaranteed loans. 

Finally, there are slight differences based on demographics. Male borrowers operating as 

individuals and borrowers forming part of a borrowing entity used slightly more years of 

eligibility (2.5 and 2.2 years on average) than female borrowers (2.0 years on average) (Figure

16). Veteran borrowers used slightly more years (2.6 years on average) as compared to nonveteran borrowers (2.4 years on average) (Figure 17). A large part of this may be due to the fact 

that microloans to veterans do not count against term limits, encouraging a higher degree of 

usage. SDA borrowers used fewer years of loan eligibility than non-SDA borrowers (2.1 vs 2.4 

years) (Figure 18). Borrowers identifying as White, American Indian, or Asian used more years 

of loan eligibility (2.4, 2.2, and 2.1 years on average) compared to borrowers reporting as Black 

or Hispanic (1.8 and 1.7 years on average) (Figure 19). 

Characteristics of Borrowers Who Have Reached Term Limits

Term-limited borrowers are not necessarily less financially sound

Term-limited borrowers have, on average, larger asset and debt levels compared to non-term 

limited borrowers. 71 In 2021, term-limited borrowers had average assets of $1,073,917 and 

debts of $547,246, resulting in average net equity of $526,671 (Table 7). In contrast, non-term 

limited borrowers had, on average, assets of $791,365 and debts of $486,017, resulting in 

average equity of $305,347. Over the 2010-2021 period, term-limited borrowers had 1.2 times 

the level of total assets and 1.1 times the level of total debt compared to non-term limited 

borrowers. On average over that period, equity levels for term-limited borrowers were 1.3 times 

that of non-term limited borrowers.

Borrowers reaching their term-limits also have higher levels of net farm income. On average, 

borrowers receiving a DOL in 2021 earned $338,570 in gross farm revenues compared to 

$266,048 for non-term limited farmers. They also generated an average of $88,696 in net 

income compared $84,790 for non-term limited farmers receiving a loan in 2021 (Table 8). In 

general, this reflects the greater dependence of larger family farms on FSA loans.

70 For this report, farm size was based on the value of farm production: low-sales farms are less than or equal to 

$100,000 in farm production value; small farms are over $100,000 and less than or equal to $350,000 in farm 

production value; mid-sized farms are over $350,000 and to less than or equal to $1 million in farm production 

value; and large farms have more than $1 million in farm production value. 71 While more term-limited borrowers operate farm in small- and medium-size classes (with sales from $100,000 up 

to $1 million) relative to all DOL borrowers, the average over all size classes shows slightly higher assets, debt, and 

gross income for term-limited farms.
19

Despite their larger farm size and income generating capacity, financial ratios were similar in a 

comparison of term-limited and non-term-limited borrowers. Both were within the acceptable 

level of 30 to 70 percent for debt-to-asset ratios and 1 to 1.5 for liquidity ratios (Table 7).72 In 

general, term-limited borrowers were slightly less efficient in converting revenue to income, as 

evidenced by lower net income ratios. On average, their net income ratios were 0.02 points 

lower than non term limited borrowers over the 2010-2021 time period (Table 8). Regardless of 

this difference, both had net income ratios above the acceptable cut off of 20 percent.

Variation by region 

Certain geographic locations have a greater density of term limited borrowers. By USDA 

production region, term-limited borrowers are largely concentrated in the Northern Plains, 

followed by the Corn Belt, Appalachia, and the Lake States (Figure 20). More specifically,

term-limited borrowers are concentrated in the Red River Valley, eastern Nebraska and the 

Dakotas, the Texas High Plains, and Kentucky (Figure 9). Over 40 percent of term limited 

borrowers reside in 6 states: Nebraska (9.5 percent), Iowa (8.0 percent), Texas (6.8 percent), 

Minnesota (6.4 percent), Kentucky (5.6 percent), and South Dakota (4.5 percent) (Appendix 2). 

Just 10 of the 435 Congressional Districts accounted for one-third of all term-limited borrowers 

and 22 Congressional districts account for half of all term limited borrowers (Appendix 3).While 

the regional distribution of term limited borrowers largely reflects the distribution of all FSA 

loans, the Northern Plains, Corn Belt, Lake States, and Southeast had a relatively higher share of 

all U.S. term-limited DOL borrowers compared to the share of all U.S. DOL borrowers. While 

the Northern Plains represents 14.4 percent of all DOL borrowers, this region represented 20.5 of 

all term-limited borrowers at the end of 2021 (Figure 20). Although less extreme, the Corn Belt 

and Lake States had 22.3 percent of all DOL borrowers at the end of 2021 and 26.5 percent of 

term limited borrowers.

In contrast, a smaller share of term-limited borrowers are concentrated in the Delta, Pacific, 

Northeast, Mountain, and Southern Plains compared to their DOL borrower numbers. While the 

Delta region represents 8.7 percent of all DOL borrowers, it represents only 5.2 percent of all 

term limited borrowers at the end of 2021 (Figure 20). Similarly, the Southern Plains, Northeast 

and Mountain regions represent 29.8 percent of all DOL borrowers, they represent only 24.5

percent of all term-limited borrowers at the end of 2021 (Figure 20).

Variation by farm type

About 40 percent of term-limited borrowers operated farms specializing in row crops in 2021, 

reflecting their greater reliance on annual operating loans (Figure 21). DOL borrowers are more 

likely to specialize in row crops, beef and dairy cattle, and poultry, other livestock and unknown; 

however, compared to all DOL borrowers, term-limited borrowers are more likely to specialize

in row crops, followed by dairy cattle and specialty crops. While 32.5 percent of all DOL 

borrowers operate farms specializing in row crops, dairy cattle, or specialty crops, 53.0 percent 

of all term-limited borrowers operated farms of this type at the end of 2021 (Figure 21). 

U.S. term-limited borrowers are more heavily concentrated in corn farming (16.3 percent of all 

term limited borrowers compared to 7.7 percent of all DOL borrowers at the end of 2021), cotton 

72 Acceptable levels for financial ratios are defined in the Borrower Account Classification System as outlined in 1-

FLP (Part 8, Section 4).
20

farming (5.7 percent vs 2.5 percent of all DOL borrowers), vegetable and melon farming (4.2 

percent vs 1.9 percent), and all other grain and oilseed farming (10.2 percent vs 5.7 percent) 

(Figure 22). They are less likely to specialize in dairy or livestock production. 

Variation by farm size

Term-limited borrowers are more likely to operate small- or mid-sized farms and less likely to 

operate low sales farms, as indicated by the share of U.S. term-limited borrowers exceeding the 

share of all U.S. DOL borrowers (Figure 8).73 More than two-thirds of all term-limited 

borrowers operated small- or mid-sized farms at the end of 2021 (Figure 8). In comparison, less 

than one half of all DOL borrowers operated small or mid-sized farms at the end of 2021 (Figure 

8). In contrast, 50 percent of all DOL borrowers were low sales farms, but only 26 percent of 

term limited borrowers operated low sales farms at the end of 2021 (Figure 8). 

Variation by demographic characteristics

Eighty percent of term limited DOL borrowers report as males operating as an individual male; 

91 percent of term-limited DOL borrowers are non-veterans, and 86 percent are white (Figures

23-25). Only 13 percent of term limited borrowers are Socially Disadvantaged (Figure 26), 

despite that category making up nearly 20 percent of borrowers. This indicates that non-SDA 

borrowers are in the program longer. 

There are a few minor demographic differences between term-limited borrowers and the overall 

DOL borrower population. The largest difference is that more males reap the benefits of a 

longer relationship with FSA (80.2 percent for term-limited borrowers vs. 65.3 percent of all 

DOL operators) (Figure 23). A slightly higher percentage report as veterans (9.4 percent for 

term-limited borrowers vs. 8.6 percent for all DOL borrowers) (Figure 24). They are less likely 

to be classified as SDA74 compared to non-term-limited borrowers (13.4 percent of term-limited 

borrowers are SDA compared to 19.0 percent of all DOL borrowers) (Figure 26).

Characteristics of Active Borrowers who May Reach Term Limits in the Future 

To examine the characteristics of borrowers who may become term limited in upcoming years, 

borrowers using 5 or more years of eligibility are analyzed. The characteristics of borrowers 

who may become term limited in the future largely follow trends previously noted for termlimited borrowers. DOL borrowers using 5 or more years of loan eligibility are located in the 

Northern Plains (19.7 percent), Corn Belt (13.5 percent), Appalachia (12.5 percent), and Lake 

States (12.3 percent) (Figure 20). While they traditionally have not comprised a large share of 

borrowers in the Delta, Mountain, Northeast, or Southern Plains regions, that share may soon 

grow (Figure 20). 

Borrowers who may become term limited largely operate small farms (47.9 percent), low sales

farms (28.3 percent), or medium-sized farms (20.8 percent) (Figure 8). A growing share of small 

73 Small farms are defined as having more than $100,000 to $350,000 in value of production, medium-sized farms as 

having more than $350,000 to $1,000,000 in value of production, and large-sized farms as having over $1,000,000 

in value of production. Low sales farms are defined as earning less than or equal to $100,000 in value of production 

and represent operators for which farming is only a part time occupation. They most likely have off-farm sources of 

income. 

74 These groups consist of American Indians or Alaskan Natives, Asians, Blacks or African Americans, Native 

Hawaiians or other Pacific Islanders, Hispanics, and women as the primary borrower.
21

and low sales farms may soon reach term limits (Fig 8). Across all farm sizes, over 70 percent 

operate row crop (41.4 percent) or beef cattle operations (30.8 percent) (Figure 21). While 

traditionally comprising a smaller share of term limited borrowers, the share of dairy cattle and 

poultry and other livestock producers that may become term limited is growing (Figure 22). This 

trend may be cause for concern given the stressors impacting the livestock and cattle industry. 

The majority of those likely to reach term limits in future years are white (92.8 percent), males 

operating as an individual (78.3 percent), and non-veterans (89.9 percent) (Figures 23-25). A 

growing share of borrowers who may soon become term limited include groups traditionally 

targeted by FSA. This includes veteran operators (10.1 percent compared to 9.4 percent of 

current term limited borrowers), women-operated and family farm operators (5.5 percent and 

11.5 percent compared to 5.1 and 10.4 percent), and American Indian operators (6.9 percent 

compared to 6.5 percent of current term limited borrowers). (See Figures 23-25.) 

Finally, difficulty in qualifying for commercial credit may increase the demand for DOL loans in 

the future, especially in areas traditionally classified as credit deserts or for groups that 

traditionally have had a more difficult time obtaining commercial credit.

75

List of References and Suggested Readings

Tomson, Bill, “Study: Rising fertilizer prices will hit farmers hard in 2022,” AgriPulse, January 

10, 2022, https://www.agri-pulse.com/articles/17036-study-rising-fertilizer-prices-will-hitfarmers-har. 

Ahrendsen, B.L., Dodson, C.B., Short, G., Rainey, R.L. and Snell, H.A., (2022) "Beginning 

farmer and rancher credit usage by socially disadvantaged status," Agricultural Finance Review, 

Spring 2022, https://doi.org/10.1108/AFR-05-2021-0060.

Association of Equipment Manufacturers, December 2021 Ag Tractor and Combine Report U.S. 

Retail Sales, https://www.aem.org/AEM/media/docs/Statistics/US-Month-Ag-Report-12-

2021.pdf.

Campbell, Lindsey. “Farmers Struggle to Keep Up With the Rising Costs of Fertilizer,” Modern 

Farmer, March 2, 2022, https://modernfarmer.com/2022/03/fertilizer-prices/. 

Federal Reserve Bank of Chicago, AgLetter, August 2021, 

https://www.chicagofed.org/publications/agletter/2020-2024/august-2021. 

Federal Reserve Bank of Chicago, AgLetter, February 2022, 

https://www.chicagofed.org/publications/agletter/2020-2024/february-2022. 

Federal Reserve Bank of Kansas City, Ag Bulletin, Second Quarter 2021, 

https://www.kansascityfed.org/documents/8218/Ag_Bulletin_2021_Q2.pdf. 

75 For more information on credit deserts or the difficulties in lending in underserved areas and those living on or 

near tribal reservations see USDA, 2014; U.S. GAO, 2019; Native American Financial Services, 2019. 
22

Federal Reserve Bank of Kansas City, Ag Credit Survey, May 21, 2021, 

https://www.kansascityfed.org/agriculture/ag-credit-survey/farm-credit-conditions-showadditional-strength/.

Federal Reserve Bank of Kansas City, Ag Credit Survey, August 12, 2021, 

https://www.kansascityfed.org/agriculture/ag-credit-survey/strong-farm-economy-supports-agcredit-conditions/. 

Federal Reserve Bank of Kansas City, Ag Credit Survey, February 10, 2022, 

https://www.kansascityfed.org/agriculture/ag-credit-survey/rise-in-farm-real-estate-valuesaccelerates/. 

Federal Reserve Bank of Kansas City, Commercial Bank Call Report, June 23, 2021, 

https://www.kansascityfed.org/agriculture/agfinance-updates/farm-debt-declines-further-creditstress-eases/.

Federal Reserve Bank of Kansas City, Commercial Bank Call Report, December 1, 2021, 

https://www.kansascityfed.org/agriculture/agfinance-updates/limited-demand-for-farm-loansbut-strong-profits-for-ag-banks/.

Federal Reserve Bank of Kansas City, Economic Review, December 17, 2021, 

https://www.kansascityfed.org/research/economic-review/long-term-pressures-and-prospectsfor-the-us-cattle-industry/.

Federal Reserve Bank of Kansas City, Ag Finance Update, October 20, 2021, 

https://www.kansascityfed.org/agriculture/agfinance-updates/Larger-Livestock-Loans-BoostFarm-Lending/.

Federal Reserve Bank of Kansas City, Ag Finance Update, January 12, 2022, 

https://www.kansascityfed.org/agriculture/agfinance-updates/Smaller-Loans-Limit-AgriculturalLending/.

Federal Reserve Bank of Minneapolis, Fourth-Quarter 2020 Agricultural Credit Conditions 

Survey, February 10, 2021. https://www.minneapolisfed.org/article/2021/a-surprisingly-goodend-to-2020-for-farmers. 

Federal Reserve Bank of Minneapolis, Third-Quarter 2021 Agricultural Credit Conditions 

Survey, November 17, 2021, https://www.minneapolisfed.org/article/2021/even-with-severedrought-and-supply-chain-woes-farms-remain-in-good-financial-shape. 

Hoppe, Robert A. and James M. MacDonald, “Updating the ERS Farm Typology,” Economic 

Information Bulletin Number 110, USDA, ERS, April 2013, 

https://www.ers.usda.gov/webdocs/publications/43742/36482_eib110.pdf?v=1978.9. 

Iowa State University, Ag Decision Maker, 2020 Farmland Value Survey Iowa State University, 

December 2020, https://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html.
23

Kuethe, Todd and Craig Dobbins, Indiana farmland values increase but signal concern of

potential COVID-19 slump, Purdue Agricultural Economics Report, July 2020, 

https://ag.purdue.edu/agecon/Documents/PAER/PAER_2020_July.pdf. 

Native American Financial Services, Native-owned Banks and Credit Unions: Serving the 

Underserved, February 5, 2019, https://nativefinance.org/news/native-owned-banks-and-creditunions-serving-the-underserved/.

Southeast Agnet Radio Network, No Change in Land Values in 2020, August 17, 2021, 

https://southeastagnet.com/2020/08/17/usda-land-values-2020/.

Texas A&M University, Agricultural and Food Policy Center, Economic Impact of Higher 

Fertilizer Prices on AFPC’s Representative Crop Farms, January 2022, 

https://www.afpc.tamu.edu/research/publications/files/711/BP-22-01-Fertilizer.pdf. 

The President's Budget for Fiscal Year 2024, 2024 USDA Explanatory Notes--Farm Service 

Agency, pp. 27-45, https://www.usda.gov/sites/default/files/documents/27-2024-FSA.pdf.

U.S. Department of Agriculture, Economic Research Service, Highlights from the February 

2022 Farm Income Forecast, February 4, 2022, https://www.ers.usda.gov/topics/farmeconomy/farm-sector-income-finances/highlights-from-the-farm-income-forecast/. 

U.S. Department of Agriculture, Economic Research Service, Farm Business Income, February 

4, 2022, https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/farmbusiness-income/.

U.S. Department of Agriculture, Economic Research Service, Farm Sector Income Forecast, 

February 4, 2022, https://www.ers.usda.gov/topics/farm-economy/farm-sector-incomefinances/farm-sector-income-forecast/. 

U.S. Department of Agriculture, Economic Research Service, Farm Sector Income & 

Finances: Assets, Debts and Wealth, February 4, 2022, https://www.ers.usda.gov/topics/farmeconomy/farm-sector-income-finances/assets-debt-and-wealth/. 

U.S. Department of Agriculture, Economic Research Service, Farmland Values, 

https://www.ers.usda.gov/topics/farm-economy/land-use-land-value-tenure/farmland-value/. 

U.S. Department of Agriculture, Economic Research Service, Fertilizer prices spike in leading 

U.S. market in late 2021, just ahead of 2022 planting season, February 2022, 

https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=103194

U.S. Department of Agriculture, Fiscal Year 2022 Budget Summary, 

https://www.usda.gov/sites/default/files/documents/2022-budget-summary.

U.S. Department of Agriculture, News Release, Jan 22, 2021, 

https://www.nass.usda.gov/Newsroom/2021/01-22-2021.php.

U.S. Department of Agriculture, Sector at a Glance: Cattle & Beef, 

https://www.ers.usda.gov/topics/animal-products/cattle-beef/sector-at-a-glance/.
24

U.S. Department of Agriculture, Sector at a Glance: Hogs & Pork, 

https://www.ers.usda.gov/topics/animal-products/hogs-pork/sector-at-a-glance/. 

U.S. Department of Agriculture, Using Existing Regulatory Flexibilities to Lend in Credit 

Deserts and Areas with Unique Circumstances, Notice FLP-665, December 1, 2014, 

https://www.fsa.usda.gov/Internet/FSA_Notice/flp_665.pdf. 

U.S. Government Accountability Office (GAO), Indian Issues: Agricultural Credit Needs and 

Barriers to Lending on Tribal Lands, Report to Congressional Committees, May 2019, 

https://www.gao.gov/assets/gao-19-464.pdf. 
25

Appendix 1. Text of Legislation from Section 5104 of the Agricultural Act of 2014 
Table 1. Selected characteristics of direct operating loan (DOL) borrowers

Cumulative number of 

borrowers who have 

received DOLs since 

19931

Cumulative number of 

borrowers with an 

outstanding direct loan 

balance2,3

Cumulative number of 

borrowers with ONLY a

DOL balance2,4

2021 117,867 96,312 48,387

2020 111,561 97,688 50,624

2019 106,398 95,456 50,370

2018 102,209 93,398 50,414

2017 98,239 91,136 49,922

2016 93,896 87,793 48,305

2015 89,315 86,078 47,317

2014 84,847 79,283 42,483

2013 81,067 76,602 39,986

2012 77,550 81,020 39,790

2011 72,639 78,697 37,240

2010 5 68,361 78,872 36,225

1 Cumulative number of current and past borrowers subject to term limits who have received DOLs since 1993; 

includes beginning farmers and others receiving a waiver but excludes exemptions. Borrowers are counted only 

once even if they received multiple loans that year.

2 Numbers differ this year due to a change in methodology reflecting inclusion of monthly data on loan balances and 

payments, creating a continuous count of borrowers with a balance at any time during the year. 

3

 Includes direct farm ownership, operating, or emergency loan balances outstanding at calendar-year end. 

4

 Includes direct operating loan balances outstanding at calendar-year end. 

5 The first column is the sum of total borrowers in the dataset from 1993 through 2010 and the third and fourth 

columns are the ending balances for 2010. 

Sources: USDA-FSA OBFN database, December 31, 2021; USDA-FSA PLAS and County Office Committee 

Election database, December 31st (2008 through 2020).

26
Table 2. Selected characteristics of term-limited direct operating loan (DOL) borrowers

Year

Borrowers reaching term limits 

during the calendar year 

(cumulative)

1

Borrowers reaching term limits each 

calendar year2

Beginning farmers 

with waivers as a 

share of term-limited 

DOL borrowers3

Number of 

borrowers

Percent of all 

DOL 

borrowers

Number of 

borrowers

Percent of all DOL 

borrowers with 

outstanding loan 

balance

2021 9,934 8.4% 814 1.7% 367

2020 9,120 8.2% 678 1.3% 165

2019 8,442 7.9% 603 1.2% 73

2018 7,839 7.7% 482 1.0% 44

2017 7,357 7.5% 512 1.0% 14

2016 6,845 7.3% 554 1.1% 0

2015 6,291 7.0% 563 1.2% 0

2014 5,728 6.8% 416 1.0% 0

2013 5,312 6.6% 349 0.9% 0

2012 4,963 6.4% 366 0.9% 0

2011 4,597 6.3% 352 0.9% 0

2010 4

4,245 6.2% 388 1.1% 0

Total 5 6,077 

Average 6 6,723 7.2% 506 1.1% 1 Number of current and past borrowers who have completed 6 or more years of eligibility and have not received subsequent 

DOLs; includes beginning farmers currently receiving a waiver.

2 Numbers differ this year due to a change in methodology to reflect: (1) borrowers receiving a loan in the 7th year; (2) 

beginning farmers meeting term limits during the maximum of (a) their last year as a beginning farmer or (b) the last year a 

DOL was received; and (3) incorporation of monthly data on balance payments, creating a continuous count of borrowers with a 

balance any time during the year.

3 Number of beginning farmers who have completed 10 or more years of beginning farmer status, as well as 6 or more years of 

eligibility and have not received subsequent waivers (as of 2021). 4 The second column is the sum of total borrowers in the dataset from 1993 through 2010 and the third through sixth columns 

are the ending balances for 2010.

5 This is the total number of borrowers reaching term limits between calendar years 2010-2021. 6 These are the averages for borrowers reaching term limits between calendar years 2010-2021.

Sources: USDA-FSA OBFN database, December 31, 2021; USDA-FSA PLAS and County Office Committee Election 

Database, December 31st (2008 through 2021).

27
Table 3. Term-limited direct loan borrowers by outstanding loan balance type

Year

Number of 

borrowers 

reaching term 

limits during 

the calendar 

year 

(cumulatively) 

1

Borrowers with an 

outstanding direct loan 

balance 1,2

Borrowers 

with a 

DOL 

balance 1,3

Borrowers with a 

guaranteed loan 

balance 1

Number of 

borrowers Percent 

Number 

of 

borrowers Percent 

Number of 

borrowers Percent 

2021 9,934 3,858 39% 3,433 35% 1466 15%

2020 9,120 4,271 47% 3,449 38% 1430 16%

2019 8,442 3,930 47% 3,196 38% 1302 15%

2018 7,839 3,632 46% 2,962 38% 1345 17%

2017 7,357 3,515 48% 2,905 39% 1099 15%

2016 6,845 3,372 49% 2,807 41% 978 14%

2015 6,291 3,172 50% 2,641 42% 891 14%

2014 5,728 2,886 50% 2,394 42% 867 15%

2013 5,312 2,836 53% 2,348 44% 862 16%

2012 4,963 2,924 59% 2,470 50% 862 17%

2011 4,597 2,745 60% 2,310 50% 829 18%

2010 4 4,245 2,628 62% 2,252 53% 769 18%

1 Number of current and past borrowers who have completed 6 or more years of eligibility and have not 

received subsequent DOLs; includes beginning farmers currently receiving a waiver. 

2 Includes Direct Operating (DO), Direct Farm Ownership (DFO), and Emergency Loans. 

3

 Excludes those with only Direct Operating (DO), Direct Farm Ownership (DFO), or Emergency 

Loans. 

4 The first column is the sum of total borrowers in the dataset from 1993 through 2010. The second 

through seventh columns are the ending balances for 2010. 

Sources: USDA-FSA OBFN database, December 31, 2021; USDA-FSA PLAS, December 31, 2021.

28
Table 4. Direct loan borrowers who received an FSA non-direct-operating loan after reaching term 

limits

Year that 

term limit is reached

Guaranteed 

operating loan 

borrowers 1

Emergency loan 

borrowers2

Farm ownership 

loan borrowers3

Restructured operating 

loan borrowers 4

2021 3 16 25 0

2020 28 18 35 17

2019 76 3 47 61

2018 51 5 32 54

2017 61 10 31 74

2016 103 16 25 106

2015 104 18 35 131

2014 77 3 47 90

2013 64 5 32 61

2012 86 10 31 71

2011 84 16 25 59

2010 108 18 35 28

2010-2021 5 845 138 400 752 1 Number of borrowers reaching term limits that year who received a guaranteed operating loan in any year during or 

after when the term limit was reached. 2 Number of borrowers reaching term limits that year who received an emergency loan in any year during or after 

when the term limit was reached. 3 Number of borrowers reaching term limits that year who received a farm ownership loan in any year during or after 

when the term limit was reached. 4 Number of borrowers reaching term limits that year who received a restructuring of their operating loan in any year 

during or after when the term limit was reached. 5 Totals for borrowers reaching term limits between calendar years 2010-2021.

Sources: USDA-FSA OBFN database, December 31, 2021; USDA-FSA PLAS, December 315t (2008 through 2021).

29
Table 5. Term-limited direct loan borrowers eligible to vote in county office elections

Year

Eligible county office committee electors 1

Number

Share of total term-limited 

borrowers

2021 7,831 79%

2020 7,313 80%

2019 6,852 81%

2018 6,403 82%

2017 6,045 82%

2016 5,689 83%

2015 5,311 84%

2014 4,913 86%

2013 4,634 87%

2012 4,386 88%

2011 4,101 89%

2010 2 3,745 88% 1 Number of term limited borrowers who were classified as eligible to vote in the last county office committee

election held in their local administrative area. This includes active and deceased term limited borrowers as of 

2021. 

2 The second column entry for 2010 reflects the sum of total borrowers in the dataset from 1993 through 2010.

Sources: USDA-FSA OBFN database, December 31, 2021; USDA-County Office Committee database (2008 

through 2021).

30
Table 6. Term-limited direct loan borrowers by type of debt write-off received

Year

Total term-limited 

borrowers receiving 

debt write-off 1 Number by type of debt write-off Deaths 5

Number Percent

Direct 

write-off 

only 2

Guaranteed 

loss claim 

only 3

Both direct 

write-off & 

guaranteed 

loss claim 4 Number Percent

2021 490 5% 368 92 30 766 8%

2020 488 5% 363 95 30 720 8%

2019 468 6% 355 83 30 623 7%

2018 462 6% 351 82 29 546 7%

2017 458 6% 349 80 29 477 6%

2016 420 6% 331 64 25 413 6%

2015 396 6% 316 58 22 359 6%

2014 352 6% 291 42 19 316 6%

2013 337 6% 273 46 18 257 5%

2012 318 6% 251 51 16 215 4%

2011 283 6% 223 46 14 213 5%

2010 6 255 6% 199 43 13 212 5% 1 Number of current and past term-limited borrowers incurring debt settlement on any outstanding direct loan 

after term limits were reached. Debt write-offs include direct write-offs only, guaranteed loss claims only, and 

both direct write-offs and guaranteed loss claims. Write-offs include bankruptcy, debt settlement, or guaranteed 

loss claims. 

2 Number of term-limited borrowers receiving a direct loan write-off only (no guaranteed loan loss claim) after 

reaching term limits. 

3 Number of term-limited borrowers with a guaranteed loan loss claim only (no direct loan write-off) paid on their 

behalf after reaching term limits. 

4 Number of term-limited borrowers receiving both a guaranteed loan loss claim paid on their behalf and a direct 

loan write-off after reaching term limits. 5 Number of term-limited borrowers who died after term limits were reached. 6 Number of borrowers in the 2010 row is the sum of total borrowers in the dataset from 1993 through 2010.

Sources: USDA-FSA OBFN database, December 31, 2021; USDA-FSA PLAS, December 315t (2008 through 

2021).

31
Table 7. Balance sheet and liquidity characteristics for term-limited direct operating loan borrowers at time of 

last obligation compared with all other borrowers receiving direct operating loans during that year

Year

Assets Debt Equity Debt-Asset Liquidity Ratio

Term 

Limited

Not 

Term 

Limited

Term 

Limited

Not 

Term 

Limited

Term 

Limited

Not 

Term 

Limited

Term 

Limited

Not 

Term 

Limited

Term 

Limited

Not 

Term 

Limited

2021 1,073,917 791,365 547,246 486,017 526,671 305,347 0.51 0.61 1.17 0.96

2020 890,889 563,027 465,633 347,818 425,256 215,210 0.52 0.62 0.91 1.03

2019 1,001,397 703,608 519,189 421,415 482,208 282,194 0.52 0.60 0.96 0.95

2018 968,092 727,433 514,342 398,425 453,750 329,008 0.53 0.55 0.97 1.10

2017 891,982 748,594 479,407 410,770 412,575 337,824 0.54 0.55 0.85 0.99

2016 897,878 756,053 448,222 429,101 449,655 326,953 0.50 0.57 1.01 0.94

2015 845,198 666,159 415,401 360,912 429,796 305,247 0.49 0.54 0.98 1.00

2014 845,856 627,961 418,217 342,169 427,638 285,792 0.49 0.54 0.96 1.06

2013 735,232 712,458 402,845 360,993 332,387 351,465 0.55 0.51 1.06 1.16

2012 817,583 645,653 413,647 326,635 403,936 319,018 0.51 0.51 1.05 1.06

2011 823,301 781,597 428,695 410,311 394,605 371,287 0.52 0.52 1.11 1.17

2010 770,528 942,357 422,007 512,646 348,520 429,711 0.55 0.54 1.21 1.21

Average 

2010-

2021 880,154 722,189 456,238 400,601 423,917 321,588 0.52 0.56 1.02 1.05 

Data on term limited borrowers were matched with the most recent record from the Farm Business Plan by borrower ID. Records 

were only used for those borrowers who had an active balance sheet within 2 years of the last DOL received. 

Source: Farm Service Agency, Web-Equity Farm Business Plan Database, December 2021

32
Table 8. Summary income characteristics for term-limited direct operating loan borrowers at time of last 

obligation compared with all other borrowers receiving direct operating loans during that year

Gross Revenues Net Income Net Income Ratio

Term 

Limited Not Term Limited Term Limited

Not Term 

Limited

Term 

Limited Not Term Limited

2021 338,570 266,048 88,696 84,790 0.26 0.32

2020 226,114 189,983 54,798 57,266 0.24 0.30

2019 277,291 211,913 57,300 49,434 0.21 0.23

2018 276,199 206,732 49,087 55,052 0.18 0.27

2017 268,353 202,516 60,799 49,635 0.23 0.25

2016 285,199 241,316 53,206 52,265 0.19 0.22

2015 305,471 220,999 61,848 52,253 0.20 0.24

2014 241,541 218,213 56,898 53,140 0.24 0.24

2013 302,867 244,803 65,557 60,368 0.22 0.25

2012 289,900 220,856 77,259 50,638 0.27 0.23

2011 277,689 256,557 63,774 54,840 0.23 0.21

2010 269,066 317,902 51,933 50,995 0.19 0.16

Average 

2010-

2021 274,517 230,163 59,314 53,262 0.22 0.24 

Data on term limited borrowers were matched with the most recent record from the Farm Business Plan by borrower ID. 

Records were only used for those borrowers who had an active balance sheet within 2 years of the last DOL received. 

Source: Farm Service Agency, Web-Equity Farm Business Plan Database, December 2021

33
Figure 1. Direct loan obligations and applications received by fiscal year

Figure 2. Guaranteed loan obligations and applications received by fiscal year

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

0.0

0.5

1.0

1.5

2.0

2.5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Applications (000s)

2020 $ (billions) 

DOL DFO Applications Received

Applications received include: Direct Farm Ownership (DFO) and Direct Operating Loan (DOL) applications. 

Source: USDA FSA Monthly Management Reports for September.

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Applications (1000s)

2020 $ (billions) 

GOL GFO Applications Received

Applications received include Guaranteed Farm Ownership Loan (GFO) and Guaranteed Operating Loan (GOL) 

applications. 

Source: USDA FSA Monthly Management Reports for September.

34
Figure 3. Direct loan portfolio distribution across loan types by year

Figure 4. Number of direct operating borrowers by loan type and year 

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Dollars of Direct Loans 

DFO DOL DEM

Includes Direct Farm Ownership (DFO), Direct Operating Loan (DOL) and Direct Emergency Loan 

(DEM) loans. Calculations are based on the cumulative loan balances for borrowers having an 

outstanding loan as of December 31st of the calendar year.

Source: PLAS database, December 31, 2010-2021.

 -

 10,000

 20,000

 30,000

 40,000

 50,000

 60,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Number of Borrowers

DFO DOL DEM

Cumulative number of borrowers for borrowers having an outstanding direct loan as of Dec 31st of the 

calendar year. Direct loans include: Direct Farm Ownership (DFO), Direct Operating Loan (DOL) and 

Direct Emergency Loan (DEM) loans. 

Source: PLAS database, December 31, 2010-2021.

35
Figure 5. Average end-of-calendar year balance per borrower by direct loan type 

Figure 6. Share of guaranteed operating loan (GOL) and farm ownership (GFO) borrowers in default by 

quarter, seasonally adjusted 

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Average Balance ($) over the year

DFO DOL DEM Total direct

Cumulative average balances for borrowers having an outstanding direct loan as of December 31st of the 

calendar year. Total direct loans include: Direct Farm Ownership (DFO), Direct Operating Loan (DOL) and 

Direct Emergency Loan (DEM). 

Source: PLAS database, December 31, 2010-2021.

0

1

2

3

4

5

6

7

% OF ALL GUARANTEED BORROWERS

GOL GFO

Source: USDA Guaranteed Loan System (GLS) database.

36
Figure 7. Share of direct operating loan (DOL) and farm ownership (DFO) borrowers in default by 

quarter, seasonally adjusted 

Figure 8. National distribution of total direct operating loan operators, term limited borrowers, and DOL 

borrowers using 5 or more years of eligibility, by farm size 

0

5

10

15

20

25

% OF ALL DIRECT BORROWERS

DOL DFO

Source: USDA FSA R540 database.

3.7

15.1

50.1

31.1

2.9 3.0 20.6 25.9 46.9

20.8

28.3

47.9

0

10

20

30

40

50

60

large medium low sales small

Percent of all DOL borrowers

Farm Size

DOL borrowers Term Limited 5+ years eligibility

Low sales: less than or equal to $100,000 in value of production; Small farms: more than $100,000 and less 

than or equal $350,000 in value of production; Medium farms: more than $350,000 and less than or equal to 

$1,000,000 in value of production; Large farms: more htan $1,000,000 in value of production. Includes only 

borrowers with a current FBP balance sheet within the last 2 years of the last DOL loan. 

Source: USDA FSA OBFN Database and FBP dataset, December 2021.

37
Figure 9. Location of term limited DOL borrowers 

Source: USDA FSA OBFN database, December 31, 2021. 
Figure 10. Current status of borrowers reaching DOL term limits by year reached

Figure 11. Share of all direct operating loan (DOL) borrowers receiving debt settlement, restructuring, or 

becoming deceased after receiving their latest DOL loan

0

100

200

300

400

500

600

700

800

900

2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010

Number of DOL borrowers reaching term limits

Active borrower in 2021 Former borrower- written off Beginning farmer in 2021

Former borrower-deceased Paid off their loans

Source: USDA FSA OBFN Database, December 31, 2021.

16.9%

13.0%

7.7%

5.6%

4.9%

6.5%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Term Limited

Not termlimited

debt settlement deceased restructured after last loan obligation

Source: USDA FSA OBFN Database, December 31, 2021.

39
Figure 12. Distribution of all direct operating loan borrowers since 1993 by years of eligibility used 

Figure 13. Average years of direct operating loan eligibility used by USDA production region 

48.01%

20.20%

12.14%

6.69%

4.53% 3.35% 2.33% 1.32% 1.02% 0.41%

0%

10%

20%

30%

40%

50%

60%

1 2 3 4 5 6 7 8 9 10 or more

% of all borrowers since 1993

years of eligibility used

Source: USDA FSA OBFN Database, December 2021.

2.3

2.5

2.0

2.4

2.3 2.3

2.7

2.4 2.3

2.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Average 

Number of years

USDA Production Regions

Source: USDA FSA OBFN Database, December 2021.

40
Figure 14. Average years of direct operating loan eligibility used by farm type 

Figure 15. Average years of direct operating loan eligibility used by farm size 

2.3

2.5

1.9

3.0

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Beef Cattle Dairy Cattle Poultry, Other

livestock, Unknown

Row Crops Specialty Crops

Average Number of years

Source: USDA FSA OBFN Database and FBP database, December 2021.

2.6

3.2

2.2

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

large medium low sales small

Average Number of years

Farm Size

Low sales: less than or equal to $100,000 in value of production; Small farms: greater than $100,000 and less 

than or equal to $350,000 in value of production; Medium farms: greater than $350,000 and less than or 

equal to $1,000,000 in value of production; Large farms: more than $1,000,000 in value of production. 

Includes only borrowers with a current Farm Business Plan balance sheet within the last 2 years of the last DOL 

loan. 

Source: USDA FSA OBFN Database and FBP dataset December 2021

41
Figure 16. Average years of direct operating loan eligibility used by organization type

Figure 17. Average years of direct operating loan eligibility used by veteran status 

2.5

2.0 2.0 2.0 2.0

2.2

0.0

0.5

1.0

1.5

2.0

2.5

3.0

male family female male- led

organization

female- led

organization

public entity

Average Number of years

Organization type

Source: USDA FSA OBFN Database, December 2021. 

2.6

2.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Veteran Non-Veteran

Average Number of years

Veteran Status

Source: USDA FSA OBFN Database, December 2021 and SCIMS data, December 2021.

42
Figure 18. Average years of direct operating loan eligibility used by SDA group 

Figure 19. Average years of direct operating loan eligibility used by race/ethnicity

2.4

2.1

0.0

0.5

1.0

1.5

2.0

2.5

3.0

No Yes

Average Number of years

SDA group

An SDA farmer or rancher is part of a group whose members have been subject to racial, ethnic, or gender 

prejudice because of their identity as members of that group without regard to their individual qualities. 

These groups consist of American Indians or Alaskan Natives, Asians, Blacks or African-Americans, Native 

Hawaiians or other Pacific Islanders, Hispanics, and women.. Percentages are of those who chose to 

report yes or no to SDA status. 

Source: USDA FSA OBFN Database, December 2021.

2.4

2.2

1.8

2.1

1.7

0.0

0.5

1.0

1.5

2.0

2.5

White American Indian Black Asian Hispanic

Average Number of years

Race/ethnicity

Source: USDA FSA OBFN Database, December 2021 and SCIMS data, December 31, 2021.

43
Figure 20. National Distribution of total direct operating loan operators, term-limited borrowers, and 

DOL borrowers using 5 or more years of eligibility by USDA production region 

12.5

11.0

8.7

11.3

8.3 8.8

14.4

5.1 5.5

12.7

12.5 14.2 5.2 12.3 7.4 7.2 20.5 4.9 5.8 9.9

12.5

13.5

5.5

12.3

7.6 7.7

19.7

5.1 5.4

10.6

0

5

10

15

20

25

Appalachia Corn Belt Delta Lake States Mountain Northeast Northern

Plains

Pacific Southeast Southern

Plains

Percent of all DOL borrowers

USDA Production Regions

DOL borrowers Term Limited 5+ years eligibility

USDA Production Regions include-- Northeast: CN,DE,ME,MD,MA,NH,NJ,MY,PA,RI,VT; Lake States: 

MI,MN,WI; Corn Belt: IL,IN,IA,MO,OH; Northern Plains: KS,NE,ND,SD; Appalachia: KY,NC,TN,VA,WV; 

Southeast: AL,FL,GA,SC; Delta: AR,LA,MS; Southern Plains: OK, TX; Mountain: AZ,CO,JD,MT,NV,NM, UT,WY; 

Pacific: CA,OR,WA. 

44
Figure 21. National distribution of total direct operating loan borrowers, term-limited borrowers, and 

DOL borrowers using 5 or more years of eligibility by farm type 

29.6

8.9

29.1

21.5

2.0

28.2 9.1 11.0 40.8 3.1

30.8

10.5

14.0

41.4

3.3

0

5

10

15

20

25

30

35

40

45

Beef Cattle Dairy Cattle Poultry, Other

livestock, Unknown

Row Crops Specialty Crops

Percent of all DOL borrowers

Farm Type

DOL borrowers Term Limited 5+ years eligibility

Row crops: corn, soybeans, wheat, cotton, peanuts, rice, sugar, tobacco, all other grains/oilseeds, all 

other miscellaneous crops; specialty crops: berries, grapes, greenhouse, nursery and floriculture, 

potatoes, tree fruits and nuts, vegetables and melons; poultry and other livestock: broilers, chicken 

and eggs, turkeys, apiculture, aquaculture, goats, hogs and pigs, sheep, other animals unspecified. 

Source: USDA FSA OBFN database and FBP database, December 2021.

45
Figure 22. National Distribution of total direct operating loan operators, term-limited borrowers, and 

DOL borrowers using 5 or more years of eligibility by farm type 

29.6

8.9 7.7

5.7

2.5 1.9

43.6

28.2 9.1 16.3 10.2 5.7 4.2 26.3

32.0

10.9

16.7

10.7

6.1 1.8

21.9

0

5

10

15

20

25

30

35

40

45

50

Beef Cattle

Ranching and

Farming

Dairy Cattle Corn Farming All Other Grain

Oilseed Farming

Cotton Farming Vegetable and

Melon

Remaining farm

types

Percent of all DOL borrowers

Farm Type

DOL borrowers Term Limited 5+ years eligibility

Remaining farm types comprise farm types with less than 1 percent of term limited direct farm loan borrowers as of yearend 2021 and other miscellaneous crops. Farm types with less than 1 percent of term limited direct borrowers includes: 

soybeans, tree fruit and nuts, wheat, broiler and chicken production, hogs and pig farming, peanut, rice, sugar, and 

tobacco. Other miscellaneous crops include: berry, grapes, greenhouse, nursery and floiculture, potatoe, turkey 

production, apiculture, aquaculture, goat farming, sheep farming, all other animal production, and unspecified or missing. 

Source: USDA FSA OBFN Database, December 2021.

46
Figure 23. National Distribution of total direct operating loan operators, term-limited borrowers, and 

DOL borrowers using 5 or more years of eligibility by organization type 

Figure 24. National distribution of total direct operating loan borrowers, term limited borrowers, and 

DOL borrowers using 5 or more years of eligibility by veterans status

65.3

19.4

8.2 7.2

80.2 10.4 5.1 4.3

78.3

11.5

5.5 4.6

0

10

20

30

40

50

60

70

80

90

male family female organizations and public

entities

Percent of all DOL borrowers

Gender

DOL borrowers Term Limited 5+ years eligibility

Organizations includes male and female-led organizations. 

Source: USDA FSA OBFN Database, December 2021 and SCIMS data December 31, 2021.

8.6

91.4

9.4 90.6

10.1

89.9

0

10

20

30

40

50

60

70

80

90

100

Veteran Non-Veteran

Percent of all DOL borrowers

Veteran Status

DOL borrowers Term Limited 5+ years eligibility

Percentages are of those who chose to report yes or no for veteran status. 

Source: USDA FSA OBFN Database, December 2021 and SCIMS data, December 31, 2021.

47
Figure 25. National distribution of total direct operating loan borrowers, term limited borrowers, and 

DOL borrowers using 5 or more years of eligibility by race/ethnicity

Figure 26. National distribution of total direct operating loan borrowers, term limited borrowers and 

DOL borrowers using 5 or more years of eligibility by Socially Disadvantaged (SDA) group 

73.8

5.4 86.2 6.5 0.2 0.3

92.8

6.9 0.3

0

10

20

30

40

50

60

70

80

90

100

White American Indian Asian, Hispanic, Black

Percent of all DOL borrowers

Race/ethnicity

DOL borrowers Term Limited 5+ years eligibility

Percentages are of those who chose to report race/ethnicity.

Source: USDA FSA OBFN Database, December 2021 and SCIMS data, December 31, 2021.

81.0

19.0

86.6 13.4

86.2

13.8

0

10

20

30

40

50

60

70

80

90

100

No Yes

Percent of all DOL borrowers

SDA group

DOL borrowers Term Limited

An SDA farmer or rancher is part of a group whose members have been subject to racial, ethnic, or 

gender prejudice because of their identity as members of that group without regard to their individual 

qualities. These groups consist of American Indians or Alaskan Natives, Asians, Blacks or AfricanAmericans, Native Hawaiians or other Pacific Islanders, Hispanics, and women. Percentages are of 

those who chose to report yes or no to SDA status. 

Source: USDA FSA OBFN Database, December 2021..

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Appendix 2. Direct operating loan borrowers by state

State

All borrowers Term Limited Borrowers

Average years of 

eligibility used

Number of 

borrowers

Percent of National 

Total

Number of 

borrowers

Percent of National 

Total

ALABAMA 1,323 1.1% 75 0.8% 1.99

ALASKA 95 0.1% 6 0.1% 2.14

ARIZONA 557 0.5% 20 0.2% 1.86

ARKANSAS 4,571 3.9% 246 2.5% 2.09

CALIFORNIA 2,519 2.1% 158 1.6% 2.21

COLORADO 1,426 1.2% 123 1.2% 2.47

CONNECTICUT 116 0.1% 9 0.1% 2.33

DELAWARE 64 0.1% 0 0.0% 1.58

FLORIDA 1,101 0.9% 47 0.5% 1.87

GEORGIA 2,318 2.0% 254 2.6% 2.49

GUAM 58 0.0% 0 0.0% 1.29

HAWAII 533 0.5% 8 0.1% 1.67

IDAHO 2,147 1.8% 195 2.0% 2.39

ILLINOIS 2,055 1.7% 218 2.2% 2.52

INDIANA 1,212 1.0% 126 1.3% 2.47

IOWA 5,993 5.1% 796 8.0% 2.77

KANSAS 4,064 3.4% 320 3.2% 2.24

KENTUCKY 5,705 4.8% 559 5.6% 2.41

LOUISIANA 2,935 2.5% 120 1.2% 1.99

MAINE 804 0.7% 81 0.8% 2.68

MARYLAND 310 0.3% 4 0.0% 1.71

MASSACHUSETTS 630 0.5% 36 0.4% 2.13

MICHIGAN 2,521 2.1% 224 2.3% 2.33

MINNESOTA 4,834 4.1% 632 6.4% 2.79

MISSISSIPPI 2,734 2.3% 150 1.5% 2.02

MISSOURI 2,655 2.3% 219 2.2% 2.28

MONTANA 1,705 1.4% 134 1.3% 2.41

NEBRASKA 5,050 4.3% 941 9.5% 3.23

NEVADA 374 0.3% 12 0.1% 1.99

NEW HAMPSHIRE 318 0.3% 16 0.2% 2.14

NEW JERSEY 339 0.3% 26 0.3% 2.22

NEW MEXICO 1,011 0.9% 56 0.6% 1.94

NEW YORK 2,848 2.4% 157 1.6% 2.14

NORTH 

CAROLINA 2,220 1.9% 224 2.3% 2.50

NORTH DAKOTA 3,763 3.2% 337 3.4% 2.54

OHIO 999 0.8% 53 0.5% 2.03

OKLAHOMA 7,093 6.0% 305 3.1% 1.95

OREGON 1,729 1.5% 154 1.6% 2.38

PENNSYLVANIA 4,027 3.4% 315 3.2% 2.37

PUERTO RICO 1,452 1.2% 1 0.0% 1.24

RHODE ISLAND 129 0.1% 5 0.1% 2.15

SOUTH 

CAROLINA 1,700 1.4% 203 2.0% 2.64

SOUTH DAKOTA 4,068 3.5% 443 4.5% 2.61

TENNESSEE 2,948 2.5% 190 1.9% 2.16

TEXAS 7,908 6.7% 676 6.8% 2.39

UTAH 1,964 1.7% 165 1.7% 2.32

VERMONT 817 0.7% 0 0.0% 2.37

VIRGIN ISLANDS 18 0.0% 62 0.6% 1.33

VIRGINIA 1,699 1.4% 94 0.9% 1.99

WASHINGTON 1,726 1.5% 173 1.7% 2.56

WEST VIRGINIA 2,200 1.9% 172 1.7% 2.28

WISCONSIN 5,922 5.0% 362 3.6% 2.20

WYOMING 560 0.5% 32 0.3% 2.12

Totals 117,867 100% 9,934 100%

USDA FSA OBFN database, December 31, 2021.

49
Appendix 3. Congressional districts accounting for half of all term limited DOL borrowers

Congressional District

DOL borrowers1 Term Limited DOL borrowers

Number

Percent of 

National Total Number

Percent of 

District's DOL 

borrowers

Percent of 

National 

Total

Cumulative 

Percent

U.S. House Nebraska District 3 3,780 3% 724 19% 7% 7%

U.S. House South Dakota At-large 

District 4,147 4% 452 11% 5% 12%

U.S. House Minnesota District 7 2,990 3% 445 15% 4% 16%

U.S. House North Dakota At-large 

District 3,830 3% 342 9% 3% 20%

U.S. House Texas District 19 2,118 2% 268 13% 3% 22%

U.S. House Iowa District 4 1,969 2% 267 14% 3% 25%

U.S. House Oklahoma District 3 2,973 3% 208 7% 2% 27%

U.S. House Iowa District 1 1,455 1% 207 14% 2% 29%

U.S. House Nebraska District 1 1,097 1% 204 19% 2% 31%

U.S. House Arkansas District 1 2,665 2% 195 7% 2% 33%

U.S. House Kansas District 1 2,502 2% 181 7% 2% 35%

U.S. House Kentucky District 1 1,629 1% 159 10% 2% 37%

U.S. House Iowa District 2 1,425 1% 159 11% 2% 38%

U.S. House Iowa District 3 1,026 1% 157 15% 2% 40%

U.S. House Texas District 13 1,212 1% 155 13% 2% 41%

U.S. House Kentucky District 2 1,180 1% 135 11% 1% 43%

U.S. House Montana At-large District 1,768 2% 134 8% 1% 44%

U.S. House Wisconsin District 7 1,405 1% 133 9% 1% 45%

U.S. House Oregon District 2 966 1% 123 13% 1% 47%

U.S. House Idaho District 2 1,395 1% 122 9% 1% 48%

U.S. House Washington District 4 983 1% 109 11% 1% 49%

U.S. House Georgia District 8 689 1% 109 16% 1% 50%

1 This represents the total number of borrowers receiving a DOL since 1994.

Sources: USDA FSA OBFN database and SCIMS (Business Partner) Database. December 31, 2021.

50