Are cash patronage distributions taxable?

Yes. Cash patronage distributions are generally taxable as earnings, and American AgCredit sends an IRS Form 1099-PATR for each year patronage is paid. The association advises borrowers to consult their own tax advisor about their situation.

How is a cash patronage payment calculated and paid?

The distribution is based on the average daily balance of the borrower's loans for the year and is paid by ACH direct deposit to an external account chosen by the primary borrower, in the spring of the following year. Enrollment in direct deposit is required to receive a payment, and the minimum patronage payment threshold is $500.

USDA lenders

American AgCredit

American AgCredit is a financial cooperative and a member of the Farm Credit System, lending to farmers, ranchers, agribusinesses, and rural customers. It serves customer-owners in California, Colorado, Hawaii, Kansas, New Mexico, Nevada, and Oklahoma, and serves capital markets and corporate banking customers in all 50 states.

The product range covers farm and ranch real estate loans, operating loans and lines of credit, agribusiness and capital markets financing, leasing, and crop insurance, plus a program for young, beginning, and small farmers. Loan inquiries start online, and the site carries a farm loan calculator and a crop insurance agent locator. The association says its funding source allows long-term loans with repayment schedules matched to a business cycle.

Because it is a cooperative, customer-owners elect the board and share in earnings. The board has 16 directors elected by stockholders and four appointed by the elected directors, all serving five-year terms. More than $1 billion in cash patronage has been returned to customer-owners since 2005, and total patronage from 2025 results is expected to exceed $200 million. The association has grown by merger, most recently with Farm Credit of New Mexico effective October 1, 2023.

Eligibility depends on the operation and its location, and patronage is not a guaranteed return, so rates, terms, and territory are worth confirming with the association before applying.

Best for

Farmers, ranchers, and agribusinesses operating in California, Colorado, Hawaii, Kansas, New Mexico, Nevada, or Oklahoma; capital markets and corporate banking customers are served in all 50 states.

What they do

Farm and ranch real estate loans
Operating loans and lines of credit
Agribusiness loans and capital markets financing
Equipment and facility leasing
Crop insurance
Young, Beginning, and Small Farmer programs

Details

Attribute	Value
Ownership	Cooperative
Memberships	Farm Credit System member

What stands out

Has returned more than $1 billion in cash patronage to customer-owners since 2005.
Total patronage from 2025 results is expected to exceed $200 million, paid the following spring.
Serves customer-owners in California, Colorado, Hawaii, Kansas, New Mexico, Nevada, and Oklahoma.
Capital markets and corporate banking customers are served in all 50 states.
Governed by 16 directors elected by stockholders plus four appointed directors, each serving five-year terms.
Merged with Farm Credit of New Mexico effective October 1, 2023.

Common questions

Are cash patronage distributions taxable?: Yes. Cash patronage distributions are generally taxable as earnings, and American AgCredit sends an IRS Form 1099-PATR for each year patronage is paid. The association advises borrowers to consult their own tax advisor about their situation.
How is a cash patronage payment calculated and paid?: The distribution is based on the average daily balance of the borrower's loans for the year and is paid by ACH direct deposit to an external account chosen by the primary borrower, in the spring of the following year. Enrollment in direct deposit is required to receive a payment, and the minimum patronage payment threshold is $500.