Labor challenges U.S. farmers, say lenders

For many midwestern farmers and their lenders, trade policies and import tariffs aren’t the only stressors from 2025 that may continue into the new year. Labor shortages due to immigration crackdowns and demographic shifts are other concerns to add to a list that already contains the perennial challenges of increasing input costs and stagnant commodity prices..During the Midwest Agriculture Conference Sept. 30, sponsored by the Federal Reserve Bank of Chicago, Amanda Countryman laid bare what underlies today’s farm labor issue. “One of the big challenges is that in the United States, the typical American doesn't want to work on a farm,” Countryman said. “They don't want the hard labor and challenging work that comes with working in production agriculture ... and I think current policy has made it cost prohibitive to bring in workers.” Countryman is a professor at Colorado State University and an economist focused on agricultural trade.Joel Lasack, an agricultural lender with Maquoketa State Bank and chair of the Iowa Bankers Association’s agriculture committee, is no stranger to the economic struggles faced by his farm clients. Maquoketa is 40 miles from Davenport, Iowa, and has a population of over 4,000 people. Lasack’s portfolio is primarily made up of agricultural loans related to row crops and beef cattle production.Lasack noted that producers are struggling to find qualified part-time employees. “Twenty years ago, almost everyone had a family in agriculture,” he said. “Now, fewer and fewer do, so the next generation is further removed from the farm ... and [farmers] don’t want to throw just anyone into a $300,000 tractor.”While labor shortages haven’t affected credit quality, they are having an impact. “Some have invested in larger equipment so they can get by with one less person,” Lasack said. “Others form partnerships — two farmers teaming up to help each other. It’s pushing operations to be more efficient with the resources they have.”For producers facing labor challenges, technology can be a salve.Lancaster, Wis.-based Nicholas Felder is a vice president and commercial lender with MidWestOne Bank and the chair of the Wisconsin Bankers Association’s ag committee. Felder said he’s seeing exciting technology being deployed by his customers. “I’ve got one farmer who bought a drone for spraying when fields are too wet,” he said. “Another is testing a ‘see and spray’ on a John Deere sprayer that only sprays weeds. An organic farmer I know uses a ‘weed zapper’ that electrocutes weeds with no herbicide use at all. The technology is as cool as the results. Farmers who embrace it will be the leaders of the future.”Felder’s portfolio includes crops, dairy, cattle, poultry and commercial businesses. Felder said his row crop clients are the ones who have been hit the hardest by recent market volatility.“My colleagues and I have been keenly aware of the disparity in ag markets,” Felder wrote. “Certainly, there’s been the ‘haves’ and the ‘have nots’ in 2025 ... Crop farmers are in the worst projected profitability year they’ll have as an average over the last 20 years.”Felder’s part of Wisconsin hasn’t seen any significant impacts in his clients’ labor supply in comparison to last year. The dairy industry uses the most non-domestic labor in southwest Wisconsin, and they’re facing language barrier issues more than anything.Moving forward, Felder said that farmers who are the most active and engaged marketers are the ones who will fare the best amid market volatility.Many of his short or intermediate loans set around 4 percent are repricing closer to 6.5 to 7 percent. He cited a recent 2025 ABA/Farmer Mac Agricultural Lender Survey in noting that “lenders expect 52 percent of U.S. farm borrowers to be profitable in 2025 and only 50 percent in 2026.”Consolidation will continue in the market this year as land value holds steady. “Not because of the value proposition or return perceived on land, but due to the lack of available parcels for sale and the opportunity cost of not executing the buy,” Felder said.Labor availability and tariff policy will continue to be of interest as we get further into the new year. For now, farmers remain resilient.