# Cattle operating loan rates in Texas

> Operating loans for Texas cattle ranchers generally run 8.00% to 10.50% APR in early 2026, with Farm Credit and FSA direct loans at the lower end and commercial bank lines at the upper end.

**Headline:** 8.00% – 10.50% APR

## Key Figures

| Metric | Value |
| --- | --- |
| Farm Credit System (Capital Farm Credit, AgTexas) | 8.00% – 9.25% APR variable |
| Commercial banks (TX community & regional) | 9.00% – 10.50% APR |
| FSA Direct Operating Loan | 5.375% APR (Feb 2026) |
| Typical term length | 12-month revolving line; 1–7 yr intermediate |
| Typical LTV / advance rate | 65% – 75% on breeding stock and equipment |

## Detail

Texas ranchers have three main sources of operating capital: the Farm Credit System (principally Capital Farm Credit and AgTexas Farm Credit, both affiliates of the Farm Credit Bank of Texas), commercial community and regional banks, and the USDA Farm Service Agency. Farm Credit associations are cooperatively owned and return patronage dividends, which lowers the effective cost of borrowing by roughly 50 to 100 basis points below the stated note rate in recent years.

Collateral expectations are consistent across Texas lenders. Operating lines are typically secured by a first-position UCC-1 on the cattle herd at a 65% to 75% advance rate on breeding stock, with additional liens on equipment, stored feed, and — for larger lines — a deed of trust on owned pasture. FSA direct operating loans, capped at $400,000 in FY2026, carry the lowest published rate at 5.375% as of February 2026 but require demonstrated inability to obtain credit elsewhere.

Cash-flow timing on a Texas cow-calf operation is seasonal and shapes how lines are structured. Draws concentrate in spring and summer for protein supplement, hay, minerals, and breeding costs, with paydown expected after fall weaning and calf sales in October and November. The Kansas City Fed's Q4 2025 Ag Credit Survey reported continued tightening of working capital across the Tenth District, which pushed commercial bank operating rates into the 9.00% to 10.50% range while Farm Credit variable rates tracked closer to 8.00% to 9.25%.

## Frequently Asked Questions

### Do Texas ranchers qualify for FSA operating loans if they also borrow from Capital Farm Credit?

Yes. FSA direct and guaranteed operating loans can be layered with Farm Credit debt as long as total indebtedness stays within FSA's statutory caps ($400,000 direct, $2.037M guaranteed in FY2026).

### What collateral do Texas lenders expect on a cattle operating line?

Lenders typically file a UCC-1 on the cattle herd, take assignment of USDA program payments, and often require a lien on owned pasture or a deed of trust when the line exceeds roughly $250,000.

### When should a Texas cow-calf operator draw on an operating line?

Most cow-calf producers draw in spring for supplemental feed, minerals, and breeding expenses and pay the line down after fall calf sales in October and November, matching the standard Texas marketing calendar.

## Sources

1. USDA FSA Farm Loan Programs — Interest Rates (2026) — https://www.fsa.usda.gov/resources/programs/farm-loan-programs
2. Farm Credit Bank of Texas 2024 Annual Report (2024) — https://www.farmcreditbank.com/investors/financial-reports
3. Kansas City Fed Ag Credit Survey — Tenth District (2025-Q4) — https://www.kansascityfed.org/agriculture/ag-credit-survey/

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Source: Vellum — https://vellum.app/cattle-operating-loan-rates/texas