Funding the Heartland: How Minnesota Community Banks Shaped Ag Lending

Minnesota is a proud agricultural powerhouse. Ranked fifth in the U.S. for total crop sales, the “North Star State” is the number one producer of sugar beets, processed sweet corn, and green beans; number two for wild rice; and number three for dry beans and oats. Minnesota farmers have long relied on community banks for agricultural lending to keep up with their demanding work – and many Minnesota community banks were established specifically to serve the needs of farmers.

In the early 1900s, farms in Minnesota were small and mostly family-owned. Community banks provided loans for purchasing land, equipment, and supplies, helped farmers manage their finances, and even offered production and marketing guidance. Banks that survived the Great Depression continued to support their local communities and farmers through an otherwise tenuous time.

In the 1980s, falling crop prices and rising interest rates led to a wave of farm foreclosures across the state. Community banks helped farmers restructure their debt so they could stay in business.

Most recently, community banks were there to support farmers and small businesses throughout the agriculture sector with PPE assistance, lending, and advice during the COVID-19 pandemic.

Even as the agricultural sector continues to face new challenges and other industries have gained momentum across much of the state, community banks as a whole continue to play an essential role in ag lending in Minnesota, offering banking services such as loans, lines of credit, and crop insurance to farmers, ag businesses, and rural communities throughout the state. These community-minded banks continue to embrace new technologies and adjust to their customers’ needs so they can continue to serve them well for years to come.

Many community banks across Minnesota offer ag lending services. Find one near you!