The Federal Agricultural Mortgage Corporation (Farmer Mac) recently completed a $313.5 million securitization of agricultural mortgage loans.
The mortgage pool for FARM Series 2025-2 included 343 agricultural mortgage loans with an aggregate outstanding principal balance of about $313.5 million. Included in the deal was a $290 million senior tranche guaranteed by Farmer Mac and a $23.5 million unguaranteed subordinate tranche.
The senior tranche includes notes in three classes, A, A-1, and A-2, each of which are guaranteed by Farmer Mac. These three guaranteed classes provide for differing principal repayment cashflows.
“The successful completion of our seventh agricultural mortgage-backed securitization demonstrates our commitment to grow our securitization platform and support a vibrant and liquid AMBS market that is central to our core mission to improve credit accessibility in rural America,” Brad Nordholm, Farmer Mac CEO, said in a prepared statement. “This transaction reflects the strength of Farmer Mac’s portfolio, as agricultural assets continue to generate significant institutional investor demand despite the volatile macroeconomic climate.”
“We are very pleased with the tremendous support we’ve seen for this program and look forward to exploring other credit risk transfer opportunities to grow our platform while continuing to deliver high-quality opportunities for our investors,” Zack Carpenter, Farmer Mac president and chief operating officer, added in a prepared statement. “We anticipate introducing a new product in the market next year that will support the strong investor demand for agricultural assets, while also remaining in alignment with our mission fulfillment.”
A Correction, Not a Collapse
BofA Securities, Inc. and J.P. Morgan Securities LLC acted as joint bookrunners along with Raymond James & Associates, Inc., CastleOak Securities, L.P., and Seaport Global Securities LLC, as selling group members. Dechert LLP served as legal advisor to Farmer Mac. Morgan, Lewis & Bockius LLP served as legal advisor to BofA Securities, Inc., J.P. Morgan Securities LLC, Raymond James & Associates, Inc., CastleOak Securities, L.P., and Seaport Global Securities LLC.
Looking ahead, 2026 ag financing signals a correction, not a collapse, as producers and brokers recalibrate around new realities, according to Conterra Ag Capital.
“We head into 2026 with bins full, prices soft, rates drifting down (but not cheap), and cattle still staying afloat,” the private lender said in a blog post. “USDA’s most recent published WASDE has 2025 production at 16.8 billion bushels corn, 4.3 billion bushels soybeans, and 1.98 billion bushels of wheat. This translates to higher corn production compared to recent years (~10% above the last two years), but reduced soybean and wheat production.
The lender added that the Fed’s September dots point to a funds rate around 3.6% at end‑2025 and 3.4% at end‑2026. That is good news for borrowers, but because farmers borrow at a blend of both long-term and short-term rates, costs will not drop 1:1 and they’re still well above the 20‑year average. The Kansas City Federal Reserve shows rates about 0.50% lower than last year yet still about 1.25% above long‑run norms. So ag participants should Expect modest relief on operating and real‑estate notes, but not a windfall. Cash will remain king.
