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News Release | NR-26-09

FCA board receives update on Farm Credit System funding conditions, honors America’s 250th anniversary

McLEAN, Va., July 9, 2026 — At its monthly meeting today, the Farm Credit Administration board received a briefing (PDF) on funding conditions for the Farm Credit System (System) and issued a statement celebrating America’s 250th anniversary.

Funding conditions

From 2022 through March 31, 2026, the System’s outstanding debt grew by more than $90 billion, or 24%, reaching $483 billion. As of March 31, 2026, the System held 23% of the more than $2 trillion debt market for government-sponsored enterprises.

The System’s annual debt issuance decreased from $387 billion in 2022 to $281 billion in 2023. Issuance rose to $299 billion in 2024 and increased further to $339 billion in 2025, partly due to Federal Reserve rate cuts in the latter part of 2025. Through May 31, 2026, the System issued $200 billion, driven mainly by discount notes and floating-rate debt.

The briefing also covered the following topics:

  • The System’s cost of debt, risk premiums, and various aspects of its debt portfolio, including composition, maturities, issuance activities, and strategies
  • The System’s investment holdings (contingency funding) in terms of days of liquidity, composition, and adequacy to provide a sufficient funding source in lieu of Systemwide debt issuances
  • Federal Reserve and other central bank actions, geopolitical factors, credit ratings, and the impact of these factors on funding conditions year-to-date through May 31, 2026, and their potential for affecting funding conditions for the System for the remainder of 2026

Interest rates generally decreased during the latter part of 2024 and throughout 2025. This led to a marginal decline in the System’s overall funding costs. In 2026, the Federal Reserve has kept rates steady. This, along with current yield curve expectations, has reduced the System’s opportunities to exercise economically favorable call options on its outstanding callable debt.

The yield curve returned to an upward-sloping, although relatively flat shape, in early 2026. This change should help improve the System’s net interest spread. However, inflation pressures and market adjustments to new Federal Reserve leadership could flatten the yield curve in the remainder of 2026.

Risk premiums for the System’s fixed-rate debt remained steady and generally favorable, especially for securities with shorter maturities. Recently, risk premiums for floating-rate debt have risen because of an increased supply of Federal Home Loan Bank obligations and Treasury bills. Even so, these premiums remain favorable and reflect investor confidence in the continued strength of the System’s financial condition and performance.

America’s 250th anniversary

During the meeting, FCA Chairman and CEO Jeffery Hall offered the following statement to recognize the 250th anniversary of the signing of the Declaration of Independence:

“Two hundred and fifty years ago, our founders set forth the bold idea of a nation built on the principles of liberty, justice, and self-governance. It is an idea that has endured through generations due to the individual efforts of citizens across our great nation to preserve our freedoms and strengthen our public institutions.

“We, as public servants, have the privilege and responsibility of carrying that work forward and we do so by ensuring that our nation’s farmers, ranchers, and rural communities have access to a safe, sound, and dependable source of credit. Our work in support of American agriculture contributes to the strength and prosperity of our nation.”

Notational votes

Since the June 11 FCA board meeting, one notational vote was taken. Notational votes are actions the FCA board takes between board meetings.

On June 26, the board authorized the Office of the Chief Financial Officer to reallocate funds for the FY 2026 budget to cover agencywide expenses in accordance with the board’s priorities.