US farm exports reached $171 billion in 2025, and the crop in storage is the collateral that finances trade
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Farm trade is financed against the goods themselves. Warehouse receipts, pre-export advances, government-guaranteed letters of credit and development bank loans each tie the money to a harvest that moves on a calendar.
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01 · The market
US farm exports reached $171 billion in 2025 and spread across more markets
The United States sells a lot of food and crops abroad. US agricultural exports totaled $171 billion in 2025, according to the USDA Economic Research Service (ERS).
Those sales are now less concentrated. The top five markets were Mexico, Canada, the European Union, Japan and South Korea. Together they took 56% of US farm exports in 2025, down from 62% in 2024, the same ERS chart shows. Exports to the EU reached a record $14.5 billion. Exports to China fell 66% to $8.4 billion.
Why does this matter for finance? Each new market brings its own buyers, its own banks and its own payment terms. A wider spread of markets means more banks in the chain that moves the money.
Figure 1
US agricultural exports, 2025
Each card shows one export figure from USDA ERS for 2025 or 2024.
Source: USDA Economic Research Service, chart gallery item 58374, June 30, 2026.
02 · The collateral
Stored grain, cocoa and sugar can back a loan through warehouse receipts
A crop in a warehouse has value. A bank can lend against that value. In warehouse receipt finance, a bank or trader relies on goods in an independently controlled warehouse to secure the financing, as UNCTAD's 2001 study of structured commodity financing explains. This is called .
The paper that makes it work is the . It is a receipt for the goods in store. The warehouse operator issues the receipts, and those receipts form the collateral, the assets that secure the loan, according to UNCTAD's 1996 study of collateralized commodity financing.
The finance provider takes title, or legal ownership, of the goods. It does this through negotiable warehouse receipts or warrants, or through an assignment of rights, says the Global Supply Chain Finance Forum. This is one kind of . Stock may also be held for the lender by a , an independent firm that watches over the goods.
Development banks share the risk. Under its Global Warehouse Finance Program, IFC, the World Bank Group's private sector arm, takes up to 50 percent of short-term loans made to farm commodity producers or traders against warehouse receipts. Our guide to inventory finance and our card on warehouse finance go further.
Figure 2 · Interactive
Three ways a crop gets financed
Pick a route to follow the crop from field to buyer.
Steps are drawn from UNCTAD (1996, 2001), GSCFF Standard Definitions (2016), IFC, and USDA Foreign Agricultural Service program pages.
The lender never lends the full value of the crop. Finance providers advance only a percentage of the goods' value to keep a , according to the Global Supply Chain Finance Forum. That share is the advance rate. The gap is a cushion in case the price falls.
Here is a worked example with inputs for illustration only. A receipt covers 2,000 tonnes at $500 per tonne, so the crop is worth $1,000,000.00. At a 70 percent advance rate, the loan is $700,000.00. At 6.00 percent a year for 120 days, interest is $14,000.00, so $714,000.00 is due. The crop is worth less than the loan only if the price drops below $350.00 per tonne. If the price falls 20 percent, the crop is worth $800,000.00. At 70 percent, that supports a loan of $560,000.00. The client would need to pay down $140,000.00 to restore the advance rate.
Figure 3 · Try it
How much a warehouse receipt can raise
Move the sliders to change tonnes, price, advance rate and a price fall.
Days stored
Loan against the receipt
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Interest for the storage period
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Top-up after the price fall
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How it works: loan = tonnes x price x advance rate; interest = loan x annual rate x days / 360; top-up after a price fall = loan minus (value after the fall x advance rate).
Our Research Desk used simple interest: loan x annual rate x days stored / 360, with the advance set as a percentage of collateral value. The prices and rates shown are for illustration and are not Ossiano pricing.
This calculator explains the concept only. Advance rates, margins and rates vary by commodity, warehouse, jurisdiction and lender.
The 360 in the formula is the US money market custom for a year of interest. The Alternative Reference Rates Committee recommends Actual/360 for SOFR business loans, and the Federal Reserve's H.15 release annualizes money market rates on a 360-day year. This rule is a .
03 · Before the harvest ships
Pre-export finance pays the exporter before shipment, and the sale pays it back
A farmer or trader often needs cash before the crop is sold. fills that gap. Through pre-export financing, exporters are pre-paid for the products they are going to export, says UNCTAD's 1996 study. It is a form of , money paid out before the goods leave.
The loan rests on the sale contract. It is made on the back of assigned export contracts, as UNCTAD's 2001 study puts it. Assigned means the exporter hands its right to be paid to the lender, so the buyer pays the lender directly.
When a loan is repaid from selling the commodity itself, banks call it . Under the Basel 2 definition reproduced by UNCTAD in 2006, it is structured short-term lending to finance reserves, inventories or receivables of exchange-traded commodities. The exposure is repaid from the proceeds of the sale of the commodity.
Cocoa gives a real example. IFC's SUCDEN II project, disclosed July 31, 2024, is a of EUR 250 million for buying and exporting cocoa beans in Cote d'Ivoire. A syndicated loan is one loan shared by a group of lenders. IFC provides EUR 120 million on its own account. It brings in EUR 130 million from others: FMO EUR 80 million and the OPEC Fund EUR 50 million. The loan has a one-year maturity, renewable each year for up to four years. The IFC Board-approved amount is USD 363.98 million.
Our guide to pre-export finance, our guide to structured commodity finance and our card on pre-export finance cover these structures in detail.
04 · Government support for US exporters
GSM-102 puts a US guarantee behind a foreign bank's letter of credit
Some foreign buyers want time to pay. A US program helps the exporter's bank offer that time. Under , a foreign bank approved by USDA's Commodity Credit Corporation (CCC) issues a dollar-denominated, irrevocable in favor of the US exporter, according to the USDA Foreign Agricultural Service. A letter of credit is a bank's promise to pay when the right documents are presented. means it cannot be changed or cancelled unless all parties agree.
The US then stands behind that bank's promise. Typically, 98 percent of principal and a portion of interest are covered by a guarantee, the FAS program page says. GSM-102 covers credit terms of up to three years. Maximum terms may vary by country. Our guide to letters of credit explains how the credit works.
Insurance is another route. protects an exporter if a foreign buyer does not pay. The US Export-Import Bank's Single Buyer policy offers 98 percent cover for bulk agricultural sales. The US International Trade Administration notes that covers bulk commodities for up to 360 days, on its export credit insurance page. These are program facts, shared for reference. Our guide to trade credit insurance covers this insurance in full.
05 · The buyer's side
Processors and importers fund their purchases through supplier finance programs and bank instruments
Buyers need finance too. Large crop processors pay their suppliers through bank programs. ADM, the US grain processor Archer-Daniels-Midland, reported $222 million of obligations at December 31, 2024, in its 2024 annual report filed with the SEC. In such a program, the buyer confirms supplier invoices to a bank, and suppliers can ask that bank for early payment. Our guide to payables finance explains it.
Importers also use bank collections and letters of credit. In a case before the Supreme Court of Sri Lanka, a shipment of Indian white sugar was sold on terms, 45 days from the bill of lading date. Under D/A, the importer gets the shipping papers by signing a promise to pay on a set later date. Our guide to documentary collections covers D/A.
Letters of credit carry farm trade as well. In Deutsche Bank v CIMB [2017] EWHC 3380 (Comm), Deutsche Bank, as , claimed repayment from CIMB, the issuing bank, under letters of credit that financed Indian cotton trades. A confirming bank adds its own promise to pay alongside the bank that issued the credit.
06 · Ossiano view
Agricultural finance follows the crop from warehouse to buyer
Research Desk reading, for Shrini's review.
OBSERVATION 01
More markets, more paying banks
The top five US farm export markets took 56% in 2025, down from 62% in 2024, per USDA ERS. Sales spread across more destinations bring more buyer banks into the chain that settles payment.
OBSERVATION 02
Stored goods carry the credit
IFC shares up to 50 percent of short-term loans against warehouse receipts, under its Global Warehouse Finance Program. Risk sharing on that scale lets lenders extend credit to producers and traders on the strength of the stored commodity.
OBSERVATION 03
A guarantee turns a foreign LC into a US-backed exposure
GSM-102 typically guarantees 98 percent of principal behind a foreign bank's irrevocable dollar LC, per USDA FAS. The exporter's lender carries a US guarantee rather than the foreign bank alone.
Summary
The crop is the collateral, and each route ties the money to the harvest
US agricultural exports totaled $171 billion in 2025. The top five markets took 56%, down from 62% in 2024. Much of this trade is financed against the commodity. A warehouse operator issues receipts that serve as collateral. Lenders advance only a percentage of the value to keep a margin of protection.
Pre-export finance pays exporters ahead of shipment, and the sale repays it. For US exports, GSM-102 typically guarantees 98 percent of principal on credit of up to three years, behind a foreign bank's irrevocable dollar letter of credit. IFC shares up to 50 percent of warehouse receipt loans. On the buyer's side, processors use supplier finance programs, and importers use collections and letters of credit.
Related guides: Structured commodity finance; Pre-export finance; Inventory finance; Seasonal trade and working capital; Title and ownership in commodity trade; Trade credit insurance; US to Latin America corridor guide.
Instrument cards: Warehouse finance (warehouse receipts); Pre-export finance; Structured commodity finance; Inventory finance; Trade credit insurance; Documentary collection, documents against acceptance (D/A). Every term on this page is defined in the Trade Finance Glossary.
For questions on how these structures apply to existing or planned agricultural trade flows, contact the Ossiano Research Desk.
Sources
- USDA Economic Research Service, Chart gallery item 58374, top five US agricultural trading partners, June 30, 2026. Supports: US agricultural exports of $171 billion in 2025; top-five share of 56% in 2025 and 62% in 2024; EU and China figures.
- USDA Foreign Agricultural Service, About the Export Credit Guarantee Program (GSM-102), undated. Supports: 98 percent principal coverage; credit terms up to three years; foreign bank irrevocable dollar letter of credit.
- International Finance Corporation, Project disclosure 50076, SUCDEN II, July 31, 2024. Supports: SUCDEN II amount, structure and maturity.
- International Finance Corporation, Global Warehouse Finance Program, July 2026; and Global Warehouse Finance Program (global trade page), undated. Supports: up to 50 percent risk participation; collateral management agreements.
- UNCTAD secretariat, Potential Applications of Structured Commodity Financing Techniques for Banks in Developing Countries (UNCTAD/ITCD/COM/31), August 29, 2001. Supports: warehouse receipt finance; loans on the back of assigned export contracts.
- UNCTAD secretariat, Collateralized Commodity Financing, with Special Reference to the Use of Warehouse Receipts (UNCTAD/COM/84), July 2, 1996. Supports: warehouse receipts as collateral; pre-export financing.
- Global Supply Chain Finance Forum (ICC, BAFT, EBA, FCI, ITFA), Standard Definitions: Loan or Advance against Inventory, 2016. Supports: security through warehouse receipts or warrants; margin of protection.
- UNCTAD secretariat, Basel 2: The New Basel Capital Accord and its Impact on Commodity Financing in Developing Countries, July 20, 2006. Supports: commodities finance definition; repayment from sale proceeds.
- Export-Import Bank of the United States, Single Buyer Insurance, undated. Supports: 98 percent cover for bulk agricultural sales.
- US International Trade Administration, Export Credit Insurance, undated. Supports: short-term cover up to 360 days for bulk commodities.
- Archer-Daniels-Midland Co via SEC EDGAR, XBRL SupplierFinanceProgramObligation, February 20, 2025. Supports: ADM supplier finance program obligations of $222 million at December 31, 2024.
- Supreme Court of Sri Lanka, M.D. Sivakumara v People's Bank, SC/CHC/APPEAL/102/2018, March 26, 2026. Supports: Indian sugar sold on D/A terms, 45 days from the bill of lading date.
- High Court of England and Wales, Commercial Court, Deutsche Bank AG v CIMB Bank Berhad [2017] EWHC 3380 (Comm), December 14, 2017. Supports: confirming bank reimbursement claim under letters of credit for Indian cotton trades.
- Alternative Reference Rates Committee, SOFR "In Arrears" Conventions for Syndicated Business Loans, July 22, 2020. Supports: Actual/360 day count used in the calculator.
- Board of Governors of the Federal Reserve System, Selected Interest Rates (Daily), H.15, September 29, 2026. Supports: 360-day year annualization used in the calculator.
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