U.S. farm debt is forecast to rise by 3.7%—adding nearly $20 billion—to a total of approximately $561.8 billion, even as net farm income rebounds by nearly 30% over 2024 levels. Despite modest improvements in profitability, family farm bankruptcies surged 55% in 2024 to 216 filings and have continued into early 2025, with 82 cases in the first quarter, nearly double last year's pace. Delinquency rates for both real-estate and operating loans have climbed about 1%, and the share of loans rated with "major" or "severe" repayment risk reached its highest level since 202. The second Trump administration has introduced new uncertainties—from tariff reinstatements to cuts in USDA support and freezes in program funding—that have increased financial strain for producers.

In late March 2025, the USDA abruptly canceled approximately $1 billion in pandemic-era grants that had been enabling local food banks, schools, and community organizations to purchase produce directly from small farms, a lifeline for over 8,000 growers and numerous food-insecure communities. Organizations like Springfield Community Garden, which supplied meals across Kansas, Missouri, and Arkansas, now face dramatic rollbacks in their service capacity to underserved communities. Small farmers report that these grants accounted for up to 25% of annual sales, and the sudden loss has left their markets and planning in chaos.

In Minneapolis, the Institute for Agriculture and Trade Policy (IATP) has filed suit in federal court challenging the U.S. Department of Agriculture's abrupt cancellation of DEI-focused grants, including its own $111,695 award supporting the MinnieAg Network's farm-to-industry outreach efforts. The lawsuit asserts that the Trump administration's termination of multiple DEI and food systems grants occurred without individualized review and violated federal grant law by halting funding retrospectively. The IATP claims it had to expend roughly $30,000 of its own budget to complete work that had been nearly finished under the original grant terms. This legal challenge reflects broader tensions under the new administration's policy shift, led by Secretary Brooke Rollins, who recently ordered the termination of over 145 DEI grants worth up to $148.6 million.

A recent article from MyJournalCourier highlights a growing crisis in U.S. agriculture driven by an aging farmer population—one-third of producers are over age 65—combined with a dearth of successors stepping in to lead farms forward. Testimony at a Senate hearing emphasized that fewer than one-third of ag businesses have formal succession plans in place, creating systemic leadership gaps as technological complexity and sustainability pressures increase. With farm numbers declining—200,000 lost since 2007, covering around 40 million acres—the lack of formal transition planning poses a threat not only to rural economies but to national food security. As government payment volumes rise in 2025, offering short-term income support, longer-term investment in succession planning is essential to ensure intergenerational resilience in farming.

The U.S. food industry remains heavily dependent on immigrant labor, with roughly two-thirds of crop workers and dairy laborers foreign-born and many undocumented, a vulnerability under intensified immigration enforcement. Leaders like Chobani's CEO warn that the current administration's stricter measures and farm raids are disrupting food processing, prompting widespread fear and anxiety among both undocumented and legal workers. With labor tightening in meatpacking, dairies, and produce fields, food supply chains face mounting pressures, potentially driving up consumer prices unless Congress expands temporary visas and implements broader reform. This signals an urgent need for funding strategies that support migrant-inclusive workforce infrastructure, workforce training partnerships, and local social safety nets to stabilize food systems. Policy shifts under the current administration—like pauses on farm raids and calls for visa reforms—offer a pathway, but sustainable resilience will come through targeted investments in labor stability and community integration.

A new 2025 opinion piece highlights that achieving equitable, sustainable food systems worldwide isn't about hype—it demands calm, coordinated acceleration across institutions. Emphasizing collaborative investments, it urges policymakers, donors, and private actors to integrate interagency efforts, public–private partnerships, and finance mechanisms that link early-stage innovation to scale. The author cautions that fragmentation among funders and siloed initiatives hampers progress, but signals momentum under the new administration with its emphasis on systems-based agriculture and climate resilience. For development finance and community development leaders, this piece underscores the need to align capital flows—grants, concessional finance, impact investments—with long-term, system-level planning rather than short-term pilots. Its message is clear: 2025 must be the year to shift from isolated, small-scale projects to cohesive, scalable food systems finance.

U.S. agriculture is facing mounting pressure as one-third of American farmers are now over age 65 and the country has lost more than 200,000 farms—equating to 40 million acres since 2007. At a recent congressional hearing, experts warned that increasing regulatory costs, high debt burdens (with farm debt projected to exceed $560 billion in 2025), and natural disaster risks are deterring young and beginning farmers. Industry leaders stressed the urgent need for a modernized five-year Farm Bill to stabilize the sector, improve access to credit and technical aid, and support farm succession plans. They also highlighted a looming mental health crisis, as financially stressed and aging farm operators grapple with uncertainty.

CDFA Food Systems Finance Webinar Series: Revitalizing Communities Through Food Systems Redevelopment
September 30, 2025 - 2:00 PM - 3:30 PM Eastern

CDFA National Development Finance Summit
October 8-10, 2025 - San Juan, PR

CDFA Food Systems Finance Webinar Series: Evaluating Success: Exploring Key Partnerships and Frameworks for Food Systems Financing
November 25, 22025 - 2:00 PM - 3:30 PM Eastern

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