Ag Economy Update: Demand Remains Resilient Despite Ongoing Challenges

The agricultural economy continues to present a mixed picture for producers. During this update, Arlan Suderman of Stone X highlighted how elevated interest rates, high diesel costs, and uneven profitability across livestock sectors are creating challenges, particularly for younger farmers and those carrying higher debt loads. At the same time, consumer spending remains resilient, helping support demand for agricultural products.

On the livestock side, Suderman noted that cattle markets remain relatively strong, while pork producers continue to face softer demand. Beef demand has held up better than many expected despite historically high prices, while poultry continues to benefit from changing consumer preferences and demand for protein-rich diets.

In grain markets, the discussion focused on the longer-term outlook rather than immediate supply concerns. While global grain supplies remain adequate today, ongoing disruptions to global logistics, particularly in the Black Sea region, continue to create uncertainty. At the same time, growing demand for biofuels and renewable fuels is providing additional support for corn and soybean demand.

Looking ahead, Suderman expects competition for crop acreage to become increasingly important as demand growth continues. He expressed the most optimism about soybeans due to strong demand drivers, while noting that corn and wheat may require additional improvements in market fundamentals before seeing stronger price movement.

Overall, Suderman remains cautiously optimistic. While producers will need to manage risks from higher costs, interest rates, and market volatility, he believes long-term demand trends continue to provide reasons for confidence in the agricultural economy.

This content is provided for informational purposes only and is not intended to serve as investment, tax, accounting, or legal advice, nor as a substitute for the advice of qualified professionals.

The information presented reflects assumptions, source materials, and conditions as of the time of preparation and may be incomplete, inaccurate, or subject to change. Horizon Farm Credit does not endorse and is not responsible for the accuracy of information provided by third‑party sources referenced in this content.

Nothing presented here constitutes, or should be construed as, a commitment to lend or to provide any financial product or service. In no event shall Horizon Farm Credit be liable for any actions taken or decisions made in reliance upon, or use of, the information contained in this content 

Ag Economic Outlook: Bullish Fundamentals Remain in Place

Despite recent volatility, Dan Basse remains optimistic about the agricultural outlook over the next 12 to 18 months. While grain markets have faced pressure as weather concerns eased, underlying fundamentals continue to point toward tightening supplies and stronger long-term price potential.

On the crop side, hot and dry weather across parts of the U.S. has trimmed corn and soybean yield expectations, while Europe is facing significant production challenges due to extreme heat and drought. These issues are contributing to a tightening global grain balance sheet and increasing demand for imports.

Basse also highlighted several supportive factors for grain markets, including strong export demand, expanding biofuel and soybean crush capacity, ongoing geopolitical uncertainty in the Black Sea region, and weather risks tied to a potential Super El Niño. Together, these factors could help drive a grain market rally into 2027.

In livestock markets, Basse expects cattle prices to remain historically strong, although the reopening of the southern border and gradual herd rebuilding could create some moderation from recent record highs.

Overall, the outlook suggests improving conditions for grain producers, continued strength across protein markets, and growing confidence that the agricultural economy is moving beyond its recent challenges.

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This content is provided for informational purposes only and is not intended to serve as investment, tax, accounting, or legal advice, nor as a substitute for the advice of qualified professionals.

The information presented reflects assumptions, source materials, and conditions as of the time of preparation and may be incomplete, inaccurate, or subject to change. Horizon Farm Credit does not endorse and is not responsible for the accuracy of information provided by third‑party sources referenced in this content.

Nothing presented here constitutes, or should be construed as, a commitment to lend or to provide any financial product or service. In no event shall Horizon Farm Credit be liable for any actions taken or decisions made in reliance upon, or use of, the information contained in this content 

Building a home from the ground up is one of the most rewarding investments you can make. However, understanding the construction loan process is key to ensuring a smooth experience from start to finish. This guide walks you through each phase of home construction financing, helping you feel confident every step of the way.

What Is a Construction Loan?

A construction loan is a short-term, interest-only loan designed specifically to finance the building of a new home. Unlike traditional mortgages, funds are not disbursed all at once. Instead, they are released in stages as construction progresses. Once your home is complete, the loan is typically converted into a permanent mortgage, allowing you to transition seamlessly into long-term financing.

Phase One: Pre-Construction and Loan Approval

The process begins with your construction loan application, where you will provide standard financial documentation such as personal identification, proof of income, bank and asset statements, credit information, debt and liability information, employment verification, additional supporting documents and detailed project information. This includes finalized building plans, a signed construction contract, and a builder’s risk insurance quote, which protects your home during construction from risks such as fire, theft, or vandalism. Having a clear and comprehensive plan at this stage allows your lender to accurately calculate your loan amount and ensure all costs are covered. Most construction loans also include a contingency reserve, typically around 10%, to account for unexpected expenses that may arise during the build.

Within a few business days of applying, you will receive a loan estimate outlining important details such as interest rates, projected payments, and closing costs. At the same time, your lender will begin coordinating key steps in the background. An appraisal will be ordered to determine the future value of your completed home based on your plans, and title insurance will be secured to protect against potential ownership disputes. You will also receive a construction document package and a draw schedule, which explains how funds will be disbursed throughout each phase of the build. These documents are essential tools that you and your builder will review and complete together.  

Next comes the underwriting process, during which your lender carefully evaluates your financial profile, including your credit history, income, and overall ability to repay the loan. Once your application is approved, you will receive a Commitment Letter that clearly outlines the terms, conditions, and requirements of your loan. This document serves as a formal indication that your financing is approved, pending the completion of any remaining conditions.

Before moving to closing, you will need to meet certain loan conditions, such as providing proof of insurance, confirming the appraisal, and ensuring all title documentation is complete. Your lender will guide you through these final steps to make sure everything is in place. Once these conditions are satisfied, you will receive a Closing Disclosure at least three business days before your closing date. This document details your final loan terms, required funds, and disbursement information, giving you time to review everything carefully before signing.

Closing day marks a major milestone in the process. After signing your loan documents, your construction loan is officially funded, allowing your project to move forward into the building phase.  

Phase Two: The Construction Phase

Once your loan has closed, construction can begin. During this phase, your loan typically functions as a 12-month, interest-only loan, with a variable rate often tied to the Prime Rate. Your monthly payments are based only on the amount of funds that have been disbursed, not the full loan amount. As construction progresses, funds are released in stages, known as draws, which are approved after inspections confirm that each phase of the project has been completed. Before any funds can be disbursed, you must obtain the necessary building permits to ensure compliance with local regulations.  

As your home nears completion, a final inspection is conducted to confirm that all work has been completed according to the approved plans. At this stage, the final disbursement is made, and an occupancy permit is issued, signifying that your home is safe and ready for move-in.  

What Happens to My Construction Loan After Construction is Complete?

Once construction is complete, your loan is converted into a permanent mortgage through a note modification. This transition typically provides you with a fixed interest rate and a repayment term of up to 30 years. One of the biggest advantages of this process is that it does not require a second closing, which helps you avoid additional closing costs and simplifies the transition into long-term homeownership.  

Final Thoughts

Although the construction loan process can seem complex, it is designed to guide you step by step from initial planning to the completion of your dream home. By understanding each phase, from application and approval to construction and conversion, you can approach your project with greater confidence and clarity. Working closely with your lender and builder, staying organized, and preparing your documentation early will help ensure a smooth and successful homebuilding experience. If you’re ready to start talking about your construction project, give us a call at 888.339.3334.

Mechanicsburg, PA — Horizon Farm Credit welcomed members of the Pennsylvania 4-H State Council to its headquarters on Wednesday, June 17 for an interactive and educational visit designed to introduce students to careers in agriculture, financial services, and entrepreneurship.

The visit offered participants an overview of Farm Credit and its cooperative structure, highlighting how the Association supports farmers, agribusinesses, and rural communities. Students also learned about Farm Credit’s resources for young, beginning, and small (YBS) farmers, including scholarship and internship opportunities available to those pursuing careers in the agriculture industry.

“Providing opportunities like this helps students see the wide range of career paths available within agriculture,” said Johanna Rohrer, Member Education & YBS Program Officer at Horizon Farm Credit. “By combining financial education, hands-on learning, and meaningful connections, we’re helping prepare these young leaders for future success in the industry.”

Throughout the afternoon, students engaged directly with Farm Credit team members and participated in collaborative activities designed to strengthen leadership, communication, and business skills. A networking lunch and group discussions provided additional opportunities for students to connect with peers and professionals in the agricultural industry.  

A highlight of the visit was an interactive entrepreneurship exercise titled “The Goat Whisperer of Maple Farm.” During this session, students worked in teams to develop and present their own agricultural business concepts, exploring key principles including product development, cost analysis, and marketing strategy. The activity encouraged critical thinking, creativity, and real-world application of business fundamentals.  

The visit reflects Farm Credit’s ongoing commitment to investing in the next generation of agricultural leaders by supporting youth organizations like 4-H and providing access to valuable educational experiences that build career readiness and industry awareness.

The visit underscores Farm Credit’s commitment to building connections with agricultural youth organizations and supporting the next generation of industry leaders. By partnering with programs like 4-H, the Association continues to foster meaningful experiences that inspire curiosity, confidence, and long-term success in agriculture.

Mount Joy, PA — On June 3, 2026, local first responders with Robert Fulton Fire Company were awarded a grain rescue tube and specialized training from Horizon Farm Credit through Nationwide’s Grain Bin Safety advocacy campaign. The resources will be used to help protect against grain entrapments, which result in dozens of deaths across rural America.

Every year, thousands of farmers and commercial grain handlers risk their lives by entering grain bins to remove clumped or rotted grain. As rural communities have come to know all too well, the risks of entering grain bins continue to be overlooked.

“It only takes seconds, or a simple mistake, for an adult to sink in the quicksand-like flow of grain and become fully entrapped or engulfed,” said Brad Liggett, president of Agribusiness at Nationwide. “Adding to the risk is a lack of rescue equipment available to local fire departments and emergency responders who are called for help when a worker becomes trapped."

To help lead the fight against these accidents impacting agricultural communities, Nationwide began its Grain Bin Safety campaign in 2014 to bring awareness to the hazards of entering grain structures and to equip fire departments with the resources needed to respond effectively.

Robert Fulton Fire Company, located in Peach Bottom, Pennsylvania, is one of more than 452 fire departments across 35 states to receive these resources and benefit from the program since its inception.

"At Farm Credit, supporting the safety and resiliency of our rural communities is central to our mission," said Raechel Sattazahn, Director of Government, Industry, & Member Relations at Horizon Farm Credit. "Grain bin incidents remain a serious risk in agriculture, and providing first responders with the right tools and training can mean the difference between life and tragedy. We’re proud to partner with Nationwide to help equip departments like Robert Fulton Fire Company with the resources they need to protect the communities they serve.”

The grain rescue tube delivery and training was conducted by the National Education Center for Agricultural Safety (NECAS) and included simulations of entrapments and rescues using a state-of-the-art grain entrapment simulator, which is loaded on a trailer and able to hold about 100 bushels of grain.

Since 2014, at least 17 successful rescues have utilized these tools and resources.

“With long-standing roots in agriculture, we’re thankful for the work America’s farmers do and for the contributions of our valuable partners who help us make a difference with this campaign in rural communities,” said Liggett.

To learn more or view grain bin safety resources, visit www.thinkgrainbinsafety.com. 

About Horizon Farm Credit  
Horizon Farm Credit is a member-owned agricultural lending cooperative, providing consistent and reliable financing and related services to full- and part-time farmers, agricultural-related businesses, and rural landowners. The Association serves 100 counties across Delaware, Pennsylvania, and parts of Maryland, Virginia, and West Virginia. The Association has more than 21,000 members and over $7.9 billion in loans outstanding. Learn more at horizonfc.com.

About Nationwide
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified financial services and insurance organizations in the United States. Nationwide is rated A+ by Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; and pet, motorcycle and boat insurance.  For more information about Nationwide and Nationwide’s ratings, visit www.nationwide.com or Company Ratings -- Nationwide.

Mechanicsburg, PA — Farm Credit is proud to announce the launch of its Young, Beginning, and Small Farmer Grant Program, a new initiative designed to invest in the future of agriculture by empowering emerging farmers and strengthening rural communities. The program will award ten $20,000 grants to eligible farmers, providing critical funding for on-farm improvements, innovation, and business growth. 

“We work with farmers every day, and we see what it takes to get started and keep going,” said Johanna Rohrer, Horizon Farm Credit Member Education & YBS Program Officer. “We’re proud to support young, beginning, and small farmers with opportunities like this, especially when we know those investments can make a real difference in helping their operations move forward.” 

The Young, Beginning, and Small Farmer Grant Program reflects Farm Credit’s deep commitment as a cooperative to support agriculture at every stage. Whether farmers are launching a new operation, growing their business, or adapting to new challenges, young, beginning, and small farmers play a critical role in ensuring the long-term strength of the industry. 

To apply, applicants must meet at least one of the following criteria: 

• Young Farmers: Between 18-35 years of age, or 
• Beginning Farmers: 10 years or less of reported Schedule F income, or 
• Small Farmers: Less than $350,000 in annual gross cash farm income 

Applicants must live within Horizon Farm Credit's territory, may apply individually or with a co-applicant, and may farm full-time or part-time. Applicants do not need to be a Farm Credit customer to apply. 

The deadline to submit an application is August 21, 2026 at 4 p.m. 

For more information and to apply, visit horizonfc.com/ybs. Contact learning@horizonfc.com or give a member of our team a call at 888.339.3334 with questions about this program or the application.