AgriAcess Insights 2026 - Flipbook - Page 3
SPONSORED
programs from the Bank of North Dakota
Farm Sector Assets (billions), By Year
that help beginning farmers purchase
Source: Department of Agricult ure
Real estate
Machinery and vehicles
CONTENT
equipment, livestock or land.
Inventories
Investments and other financial assets
Serving those producers could be big opportunity for ag banks. First-time farmers
$4,000
“might not have the balance sheet to do
it, but they work hard, and they’re really
$3,500
tech savvy,” says Hall. Unfortunately, the
high cost of land is a challenge for farmers
$3,000
who are getting a start in their operations.
The value of farmland started to climb
$2,500
in 2021, following a period of stabilization,
according to the Department of Agricul-
$2,000
ture. The USDA pegged farm real estate
values at $4,350 per acre in 2025, an
increase of 4.3% over the prior year. Farm
$1,500
real estate accounted for an estimated
84% of the total value of farm assets in
$1,000
2025, making it a critical component of a
family farm’s wealth. And much of that
$500
land — roughly 70% — will change hands
over the next 20 years.
0
2023
2024
2025
(Forecast)
2026
(Forecast)
For many farmers, climbing real estate
values — especially on the outskirts of a
growing area — means selling their land
can be hard to turn down. That can still
be an opportunity for banks, says Hall.
Building Strength
Farming operations are capital inten-
to provide financing to borrowers. That
includes the secondary market and Farm
sive, which drives loan demand. And
Service Agency (FSA) loans, which are
while a bank could have a great staff,
guaranteed up to $2.3 million.
sometimes the borrower’s needs exceed
The state-owned Bank of North Dakota
the bank’s abilities, says Matt Senter, also a
is a unique resource, offering a range
vice president and relationship manager at
of loans to help lenders support grain
Agri-Access. “Successful institutions figure
farmers impacted by low commodities
out how to navigate that before the need
pricing, for instance. Keil says the bank is
arises.” That could mean working with
a regular user of the Bank of North Da-
specialized ag lending partners like Agri-
kota’s 2026 Farm Financial Stability Loan
Access to access capital solutions, loan
Program, which allows the producer to
participations and programs designed to
obtain a cheaper interest rate. The Bank
help banks manage concentrations while
of North Dakota holds 75% of the loan,
serving larger agricultural borrowers. Fed-
while the lender retains 25%.
eral and state programs are also available.
Forty-five percent of Dacotah’s $1.2
In addition to specialized public programs, private-sector partnerships and
billion ag loan portfolio includes corn,
participation structures can provide a
soybean and small grain production, with
path to serving larger or more complex
another 27% focused on beef cattle ranch-
agricultural borrowers.
ing, Keil says. The bank is big enough to
help large operations with their credit
needs, but it still relies on a lot of levers
Creating Opportunities
Dacotah Banks also participates in
He spent years as a frontline lender and
had many clients who sold land in highgrowth markets. “They loved to farm, so
they’d go and buy another farm one step
ahead of the development,” he says. “And
that’s where they made most of their
money, was selling their land.”
The USDA has projected that farm
real estate debt will total $404.3 billion
in 2026, up almost 5% in nominal dollars
from 2025. As land values climb, banks
will need more lending options — including flexible terms and capital strength —
to meet their clients’ needs.
Despite recent headwinds, Senter sees
a lot of opportunity in agriculture. “If you
look globally at the stability of agriculture,
the credit quality of agriculture portfolios,
it’s dynamic but it holds up well compared
to other sectors,” he says. “The client base,
they’re wonderful; they’re loyal to their
community. For a lot of banks, it could be a
great market to serve and do a lot of good.”
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