Building agricultural banking relationships for 2025’s challenging landscape and beyond

A poll of ag bankers projected that only 51% of farmers would be profitable in 2025 due to historically high interest rates and input costs set against lower commodity prices. It was a cautious sentiment captured even before the uncertainty of widespread tariffs had entered the picture.

By fall 2025, commodity crop producers and their banking partners have had to finetune their outlook even more, digesting months of trade headlines on, for instance, China’s decision to suspend its purchase of U.S. soybeans, the number one U.S. agricultural export valued at about $24.5 billion. China historically bought more than half of that total (roughly $12.6 billion worth). This week, President Trump’s administration was reportedly nearing approval of payments to farmers to offset the impacts of strong harvests, which will push down prices at the same time that weaker demand tied to the tariff wars hangs over markets.

Meanwhile, the financial services industry is seeing bigger lenders pull out of agricultural communities as they seek to minimize the risks on their books.

This means fewer options than ever for farmers but more opportunity for ag bankers and lenders committed to serving farming communities.

In this piece, I’ll highlight three strategies ag bankers and lenders can use to better serve their customers in this moment and pave the way for mutually beneficial relationships for years to come.

Double down on relationship building

Whether or not larger banks are pulling out of your region, now is an excellent time to double down on building relationships with the farmers you serve – and those you’d like to.

The operating principle to keep in mind: if a farmer doesn’t know you, they can’t do business with you. To help farmers get to know you, aim to be where they are year-round and not just during planting, harvest, or loan renewal time. This can take many forms. A few we’ve seen succeed:

• Attend live events like field days, producer conferences, kids’ FFA auctions, land auctions, and county fairs. These are great opportunities to build trust with the community you serve while getting to know their needs and concerns.
• Schedule regular check-ins and farm visits. Make it a point to proactively ask how customers and potential customers are doing to demonstrate that you care.
• Host live events with ag retailers and other trusted advisors (crop consultants, agronomists, attorneys, auctioneers, extension agents, etc.). These offer an opportunity to share valuable information with farmers while also building relationships with potential customers and referral sources.
• Create helpful content on policy updates, market trends, or general education topics that can help your farmers. Short-form video is a great format for this. Consider recording helpful videos and sending them to relevant prospects and customers via text so they can consume it on the go – while sitting in the tractor, for example.
• Update your website to include loan calculators, testimonials, and success stories. If you’re not showing up there, you’re losing opportunities.
• Email and text with purpose. Use an app that helps create personalized messages, although at scale, to segment your outreach for a customized approach. Aim to send insights that are genuinely helpful: e.g., if severe weather is predicted for their area or if new tariff information might affect their crops.

The bottom line is that local influence matters in ag lending. If you’re not consistently showing up in the physical and online spaces where your potential borrowers are, you’re missing opportunities.

Get serious about geospatial risk

Another headline we’ve seen so far this year is severe weather risk. To manage that risk, ag lenders need to understand geospatially on a map where their loans are located.

The first step to doing this is to make sure you have the tools to map your loans and attach value to each loan so you can understand, with very little effort, how severe weather events impact your portfolio and your borrowers.

When you have the ability to visualize your portfolio in this way, you can also identify where you should seek out additional borrowers to balance your risk.

Just as important, you can use your geospatial intelligence to further improve borrower relationships. For example, when severe weather is forecast, you can reach out to borrowers in your portfolio in the path of the expected event to ensure they’re aware of the forecast and offer your support.

After an extreme event – fire, flooding, insect destruction, etc. – you can similarly reach out to (to borrowers and those you’re not yet working with) offer support. This kind of outreach (which can be facilitated by a geographic information system, or GIS) is excellent for relationship building.

Another offering you can bring to the table with GIS on your side is guidance around farmer resilience and diversification. This is an excellent area to partner with agronomists and other trusted advisors to help farmers ensure they’re adapting to changing conditions.

Look for innovative opportunities to stand out

You may not have the best interest rate at any given moment, but by embracing innovation, you’ll give borrowers a reason to choose you.

What does innovation look like on the lending side? The specifics will depend on your customer base, governance, and your underlying financials. Some considerations:

• Diversification: Can you help farmers grow different crops that will fare better in changing weather and climate conditions? If so, you may be able to help them seek financing via government-sponsored initiatives.
• Could you change the terms of your input loans? For instance, can you alter when payments are due? Find opportunities for cross-collateralization?
• Could you incentivize consolidating loans with your organization? If borrowers can bring more of their loans to your bank, can they be given flexibility?
• Can you embrace a more digitized lending experience, as BAI contributor Jeff Galloway recently suggested? Farmers increasingly expect fully digital experiences from their lenders, even as they continue to want in-person interactions. The efficiencies might prove cost-saving at a valuable time.

Obviously, the devil is in the details. What works for one bank may not work for another. The important thing to keep in mind is that, while it may feel like a “wait and see” approach is prudent as the economy finds its footing, the ag lenders who use this moment to bolster their offerings and relationships will be the ones who benefit most when the economic winds shift.

Challenging times give ag bankers an opportunity to shine

The macro conditions for farmers right now are among the more challenging they’ve had to navigate. But as experienced agricultural finance professionals know, this is a cyclical industry. We’ve been here before, and we’ll be here again. New business may be slower today, but the relationship-building that drives long-term business must continue.

Now is the time to add value, offer insight and support, and deepen ties with the community you serve. These activities will shore up existing relationships and lay the groundwork for greater success when conditions improve.

Chris Peacock is Chief Product and Strategy Officer at Growers Edge