Over half of corn and soybean farmers named debt the main use of bridge payments; CNH sees a trough

When Purdue and CME asked corn and soybean producers in January how they would use government bridge payments, more than half named paying down debt as the principal use and 12% named farm machinery. USDA now forecasts government payments up sharply for 2026, and CNH says its market is at a trough. Our reading is that these payments do not by themselves show new demand for equipment. This is our reading, not a forecast. The sources differ in scope and period.

What each source says

The Purdue and CME Ag Economy Barometer, released February 3 from a survey run January 12-16, asked corn and soybean producers how they would use Farmer Bridge Assistance Program payments. More than half named paying down debt as the principal use, 25% improving working capital, 10% family living and 12% farm machinery. Separately, only 4% of survey respondents said they planned to increase machinery purchases in the coming year, and the barometer’s Farm Capital Investment Index fell 11 points to 47, its lowest since October 2024. The page does not give the number of respondents. These are stated intentions, and the question about payments went only to corn and soybean producers and only covered the bridge payments.

The Kansas City Fed’s survey of 142 lenders in the Tenth District, which includes Kansas and Nebraska, was published August 14. It found credit conditions still tightening at a gradual pace in the second quarter, with financial stress modest and fewer than 10% of farm loan balances carrying major or severe repayment problems. Strength in cattle boosted incomes in many areas and ranchland values reached new records, while profit opportunities for crop producers stayed narrow. The write-up says government payments and strong land values have supported farm balance sheets, and that trouble in the crop sector could keep weighing on credit. One Kansas lender said: “Government ad hoc disaster payments are keeping conditions manageable for most producers.”

USDA’s Economic Research Service, in forecasts dated September 3, puts 2026 net farm income at $158.4 billion, down $4.3 billion or 2.6% in nominal terms and 5.5% after inflation, though it would remain above its 2006-25 average in real terms. Net cash farm income is forecast up 0.4% nominal to $176.4 billion, or down 2.5% after inflation, and average net cash farm income per farm business is forecast up 7.1% to $121,700. Crop receipts are forecast up 6.1% and animal receipts down 5.4%. On the balance sheet, USDA forecasts working capital up 3.5% after a 15.0% fall in 2025, and sector debt up $26.4 billion, or 4.6%. Direct government payments are forecast at $47.4 billion, up $19.5 billion, or 69.8%, from $27.9 billion in 2025. USDA says the increase is largely from two categories. Farm Bill payments that follow commodity prices or revenue are forecast at $15.6 billion, up $13.4 billion, a rise USDA mostly puts down to changes the One Big Beautiful Bill Act made to the Agriculture Risk Coverage and Price Loss Coverage programs for the 2025 crop. Supplemental and ad hoc disaster aid, made up mostly of the Farmer Bridge Assistance Program and 2025 supplemental disaster assistance, is forecast at $26.5 billion, up $5.3 billion, and USDA expects it to stay high.

CNH Industrial reported on August 3 that North American industry sales volume in the second quarter fell 16% year over year for tractors under 140 horsepower, 17% for larger tractors and 7% for combines. CNH’s own agriculture net sales were flat at $3.3 billion worldwide, with higher prices offsetting lower South American volumes. Adjusted EBIT for the segment fell to $170 million from $263 million, which the release attributes to lower South American volumes, an unfavorable mix in North America and Europe, the Middle East and Africa, tariffs, and higher costs, without ranking them. CNH narrowed full-year guidance to the higher end of its earlier ranges. Its finance arm reported worldwide retail loan originations of $2.53 billion, down from $2.74 billion a year earlier, and attributed part of a revenue decline to reduced used-equipment sales from fewer operating lease maturities. Wholesale financing makes up 30% of its $28.0 billion worldwide managed portfolio. Its chief executive, Gerrit Marx, described “a market that remains at the trough of the agriculture cycle” and listed dealer network consolidation among CNH’s strategic priorities. The outlook cites weak commodity prices, costly inputs and trade uncertainty as the pressures on farmers, and says CNH is keeping its output low and working with dealers to bring channel inventory down. Marx also pointed to constructive signs: dealer stock returning to normal levels, older fleets in the field, and new and used prices sitting closer together. He added that farmer economics remain pressured.

What the numbers suggest

USDA ties most of the payment increase to programs that respond to prices or revenue and to disaster aid, and by our arithmetic on its figures the two categories above account for about $18.7 billion of the $19.5 billion rise. Set beside the Purdue answers, our reading is that farmers’ January answers point mostly to debt and working capital, with a minority of 12% naming machinery. That is our inference. The survey records intentions and not spending, the payments question went only to corn and soybean producers and only covered the bridge payments, and it does not cover the larger rise in price-linked payments. Money from any payment can still end up in a purchase. A rise in sector debt alongside intentions to pay debt down is not a contradiction, since the two measure different things, but the sources do not reconcile them.

CNH’s profit fall has several causes that the release does not rank, and North American industry volume is not among those it lists. The 16% and 17% falls in industry volume are a separate market signal. One quarter compared with a year earlier shows no direction, so we cannot say whether CNH’s trough is the bottom.

For dealers, CNH’s channel-inventory line is the nearest dealer-facing statement. CNH says it is working with dealers to bring channel inventory down, and also that dealer stock is returning to normal levels. These could describe an effort and its progress, and the release does not say where dealers stand now. It does not say whether its industry volume counts retail sales or shipments to dealers, and it gives no dealer-level stock or floor-plan balances. The 30% wholesale share of its finance portfolio is the only floor-plan-adjacent figure, and it is worldwide. Our reading is that fewer lease maturities reduce the used equipment coming from CNH’s finance arm, but the release does not say how that reaches dealers.

What is still unknown

Purdue’s figures are stated intentions from January, so none of the sources shows what farmers actually spent, or what they did with the larger price-linked payments. We used the January release, and later barometers exist that we did not review. In our reading, how long the price-linked payments last depends on prices or revenue. The periods differ, so second-quarter sales cannot be tied to payments whose timing within 2026 is not given. Dealer floor-plan balances and dealer used-inventory levels are not in these sources.