Ohio Farms Saw Working Capital Decline in 2025
Agricultural operators faced tightened liquidity and rising debt loads as expansion costs weighed on year-end balance sheets.
Updated on Oct. 14, 2026 in Corporate Finance
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Data from the 2025 Ohio Farm Business Analysis Program revealed that 60% of the 43 participating farms entered 2026 with decreased working capital. Additionally, 40% of these farms reported a shrinking net worth during the 2025 calendar year.
Why it matters
Operators increasingly leveraged debt to fund capital expansions such as real estate and grain bins, creating a tighter margin environment as borrowing costs rose. These financial pressures are compounded by looming expense increases for critical inputs.
Of the 43 farms analyzed, 40% reported increased total liabilities in 2025, while participating dairy farms carried an average debt load of 42%. The average operator in the program was 51 years old and managed 882 crop acres.
The players
Ohio Farm Business Analysis Program
A state-supported initiative that evaluates farm financial health through accrual-adjusted balance sheet reporting.
The details
Farms participating in the analysis program provided balance sheets and IRS Schedule F cash transaction records to technicians, who applied accrual adjustments to determine operational profitability. This process revealed how borrowing for capital projects and operating funds impacted balance sheets. Operators now face a projected $50 to $60 per acre increase in fertilizer expenses for the 2026 season compared to 2025.
Timeline
2025: Evaluation period for 43 participating farms.
Beginning of 2026: Farms entered the year with decreased working capital.
Market Landscape
The study relies on standardized IRS Schedule F reporting to translate diverse agricultural business activities into comparable financial performance metrics. This approach provides a consistent benchmark for evaluating liquidity against broader industry trends in capital intensive farming.
Operators should review their debt-to-asset ratios to determine if current capital expansion projects align with existing liquidity levels. Owners must also prepare for rising input costs, specifically the projected $50 to $60 per acre increase in fertilizer expenses for 2026.
The takeaway
The study highlights the risk of over-leveraging for capital assets in a volatile input-cost environment. Operators should track their working capital ratios closely and build conservative cash buffers to account for the expected 2026 fertilizer price hikes.
Further reading
For more on managing debt and capital allocation, visit our Corporate Finance section.
Source note: This article includes information reported by Farm Progress.
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