Your 2027 operating line gets decided this fall, before renewal season opens. By the time the renewal is signed, the numbers that set it were fixed months earlier: what the crop yielded, what you sold and what you held, what inputs cost, and what the balance sheet says on December 31. A farm operating line renewal looks like paperwork. It is a conversation about next year, and it is also the best look you will get at whether a bank understands your operation. Here is what a lender needs from you this fall, what you should expect back, and the one number worth knowing before you walk in.
Start with what 2025 looked like on paper, because that is the year your renewal will be judged against. In the 2025 Minnesota Farm Business Management data, 2,314 farms with instructor-reviewed books, a southern Minnesota corn acre cost about $4.38 a bushel to raise and sold for a weighted average of $4.13. Government payments of roughly $79 an acre are what turned that acre positive. Cash rent, at about $257 an acre, was the single largest line. Average net farm income across the program came back to $129,473 from $67,704 the year before, still below the five year average of $173,949. Good yields fought lower prices to a draw.
2026 has a different shape. The board rallied into harvest, and at the same time Minnesota crop condition ratings slipped through late August, soybeans more than corn. A better price on a crop that finished dry is the year when the bushels in the bin matter more than the ones in the March budget. Every plan written in March meets a different year. Bring the operation as it stands at harvest.
The single most useful number you can carry into a renewal is your cost of production per bushel. It is also the number a good lender will run with you, so it is worth knowing how we build it. We run a crop enterprise budget on every crop loan, with the operation's own figures and the Minnesota FBM averages as the benchmark. Here is the benchmark version for 2025, southern Minnesota cash rented ground, per acre.
| Per acre, 2025 FBM southern Minnesota averages | Corn | Soybeans |
|---|---|---|
| Yield (bushels) | 220 | 62 |
| Weighted average price received | $4.13 | $10.13 |
| Gross revenue, including other crop income | $925 | $635 |
| Direct expenses (seed, fertilizer, chemicals, insurance, fuel, repairs, rent, operating interest) | $826 | $550 |
| Overhead (labor, leases, farm insurance, utilities, depreciation, term interest) | $138 | $85 |
| Total cost per acre | $964 | $635 |
| Net return before government payments | ($40) | $0 |
| Government payments | $79 | $66 |
| Labor and management charge (paying yourself) | ($62) | ($40) |
| Net return after both | ($23) | $26 |
| Breakeven cost per bushel (total cost divided by yield) | $4.38 | $10.24 |
Two things to take from that table. The breakeven is before government payments and before you pay yourself, so the price that keeps the lights on and the price that makes farming worth doing are two different numbers. And the breakeven moves fast: on 220 bushel corn, every 10 bushels of yield moves it about 20 cents, and every $25 of cash rent moves it about 11 cents. Your own budget will differ from the benchmark on every line, which is the point of running it with your numbers. A second way to read the same number is to turn it into bushels. Take the $964 an acre and divide by the price you can actually get, and the answer is how many bushels every acre has to raise before you have covered your costs. Here is that arithmetic for 2025 costs, and the same costs with cash rent at $275 instead of $257, since rent is the line that varies most from one farm to the next.
| Corn at | $3.75 | $4.00 | $4.25 | $4.50 |
|---|---|---|---|---|
| Bushels to cover $964 an acre (2025 FBM cost, $257 rent) | 257 | 241 | 227 | 214 |
| Bushels to cover $982 an acre (same costs, $275 rent) | 262 | 246 | 231 | 218 |
| Net return at 220 bushels, before government payments | ($139) | ($84) | ($29) | $26 |
At $4.00 corn, a 220 bushel acre that costs $964 is 21 bushels short before the government payment arrives. Raise rent by $18 and it is 26 short. Get $4.50 and the same acre clears. Different sheet, same conclusion as the table above it: the margin lives in the yield and the rent, not in the price you hope for. If you have not built one, ask your lender to build it with you. It takes an hour, and it is the hour that makes the rest of the renewal go quickly.
Our agricultural lending team lists what a renewal review covers on the ag lending page. That list is right. What it does not say is what happens to each item after it reaches the lender, and that is the part worth knowing when you are deciding who to bank with.
Dated December 31, with inventories at what they would bring today. Grain in the bin at the local bid. Livestock at head count and weight. Prepaid inputs for 2027 as an asset, and the note used to prepay them as a liability. The balance sheet is what tells the lender whether last year's line came back, whether working capital grew or shrank, and how much of next year's crop the operation can carry on its own before the line is needed. Everything else supports it.
Acres, yields, prices, inputs, rent, term debt payments, and what it costs your family to live. That last line is the one most often left off, and it is the one that makes the projection real. A cash flow that shows a tight year is more useful to both of us than one that shows a comfortable year because a line was skipped. Use the prices you have locked in where you have them, and something conservative where you have not. If you are in the FBM program, bring the analysis your instructor reviewed. It is the best set of records a farm can hand a lender, and it is why I encourage operations that are not enrolled to look at it.
Crop in the ground is collateral at its insured value, which is why the coverage level you elect in March shows up in the size of the line you get at renewal. Tell your lender the level and the unit structure. If you are thinking about changing either one for 2027, that conversation belongs in the renewal, not after the sales closing date.
A cash basis Schedule F can show a loss in a year the operation got stronger, because you prepaid inputs and held grain. It can show a profit in a year it got weaker. You know which picture is the real one. Walk your lender through it, and a good one will already be asking. Three years of returns with the balance sheets that go with them is the record that makes a year that looks odd on one page make sense.
What is in the bin, what is under contract, what is priced and what is open, and how long you intend to hold the rest. The marketing decision is yours. You know your basis and your bins better than any lender does. The lender's job is to size the line to the plan, and an operation that is 40 percent unpriced going into winter is a different structure from one that is 80 percent sold. Neither is wrong. The line just has to be built for the one you are running.
Cash rent per acre, lease terms, and any landlord changes coming in 2027. The machinery list with what is owned free and clear marked, because that is what backs a line when the crop does not. Every existing note, its terms, and who holds the lien. Having it in one folder is what turns a two week renewal into a two day one.
Line renewal coming up? Send the balance sheet first and the rest can follow. The first conversation commits you to nothing. Talk with an ag lender
Put the whole picture on the table early. A short crop on one farm, a landlord who sold, a combine on its last season. The earlier those are on the table, the more structure options are open, and the operations that bring them early in renewal season are the ones whose lender can do the most for them. That is not about trust. It is about time. Early in the window there is room to term something out, add a guarantee, or resize the line. At the end of it there is a note coming due.
Know the window, and get in front of it. Most farm operating lines renew between November and February. Our ag lines and single pay notes run 12 to 24 months on the operation's cycle, not the calendar year, and a 24 month note takes the annual renewal off the table entirely for operations where it fits. Either way, the easiest renewals are the ones whose numbers are together when the window opens, and the earlier in it the conversation happens, the more structure options are still on the table. Our ag lines also carry no borrowing base certificate reporting, so the renewal is the one time a year the paperwork is due.
Have a number priced. A contract on part of the 2027 crop, or a sale of part of the 2026 crop before you sit down, is the clearest signal that the cash flow is a plan and not a spreadsheet. It does not have to be a big number. It has to be a real one.
Some years the projection does not cash flow at the line you had. That conversation is a normal part of ag lending and it is far easier in November than in February, because November leaves room to change the structure. Carryover on an operating line usually does not belong on an operating line, and where the collateral supports it, terming it out against equipment or real estate is the fix. Where a deal is right for the operation and still hard to fit inside conventional structure, the guarantee programs exist for exactly that. The Farm Service Agency guarantees operating loans made by banks like ours up to $2,343,000 in the current fiscal year, with an EZ Guarantee for requests up to $100,000, and the Minnesota Rural Finance Authority participates alongside us on farm loans. We use those programs as normal tools, not as last resorts. If a guarantee is what makes the year work, that is a good outcome, and knowing which door to knock on is part of our job.
If you are comparing banks this fall, the renewal is where the differences show. Six questions worth asking any lender, including us:
Those are the questions we would want asked of us. The answers are on the ag lending page and in the section below.
Agricultural lending has been a significant part of Security Bank & Trust Co. since the bank opened in Glencoe in 1935, and it still is. Adam Lindeman, Joel Ebert, Jon Dahlke, Eric Thalmann, Judy Meyer and Paula Schons are our primary ag lenders across the bank, working from the McLeod, Carver and Sibley county offices in Glencoe, Brownton, Plato, New Auburn, Winsted, Hamburg, Mayer and Cologne, and from Isanti. They have financed operations in McLeod, Carver, Sibley, Meeker and Isanti counties through good years and bad ones, and every one of them does the annual farm visit, because part of knowing an operation is standing in the yard. If you cannot get to an office, they come to you. The bank behind them has been a Minnesota family's bank since 1935, and the farm that banks with us today is often the third generation of the family that opened the account.
Most farm operating lines renew between November and February. Start assembling the year end balance sheet and next year's cash flow as harvest wraps up, so the conversation can happen early in that window, while there is still room to change the structure if the projection is tight. The line matures on your operation's cycle rather than the calendar year, so ask your lender which month yours falls in.
A year end balance sheet with inventories at current values, a cash flow projection for the coming year that includes family living, your crop insurance coverage level and unit structure, three years of tax returns, your marketing position on unsold grain or livestock, a list of rented acres with rent and lease terms, a machinery list showing what is owned free and clear, and a schedule of existing debt with lienholders. Farm Business Management records, if you are enrolled, cover most of this in one analysis.
Add every direct and overhead cost for the crop on a per acre basis, then divide by the yield you expect. On the 2025 Minnesota FBM southern Minnesota averages, corn cost $964 an acre and yielded 220 bushels, a breakeven of $4.38 a bushel; soybeans cost $635 an acre and yielded 62 bushels, a breakeven of $10.24. Both figures are before government payments and before a charge for your own labor and management, so add those back or in depending on the question you are asking. Every 10 bushels of corn yield moves the breakeven about 20 cents.
Yes. The bank makes the loan and the Farm Service Agency guarantees a portion of it. For the current federal fiscal year, FSA guarantees standard operating, farm ownership and conservation loans up to $2,343,000, and the EZ Guarantee covers operating or ownership requests up to $100,000. The guarantee is a tool for making a sound operation bankable when conventional structure is a stretch, and we use it as one.
It counts. Grain in inventory is collateral and it goes on the balance sheet at the current local price. What the lender needs alongside it is the marketing plan: how much is priced, how much is under contract, and how long you intend to hold the rest. Unsold grain at renewal is normal. The line is simply built around the plan for it.
Get the balance sheet started now, even though December 31 is months away, and call your lender before the combine is put away. If you are not banking with us and want a second set of eyes on the 2027 budget, our ag lenders will run it with you. The first conversation commits you to nothing, and the operations that have it early in renewal season are the ones that spend February planning the crop instead of refinancing it.
Want the renewal to be the easy part of winter? Bring the year end balance sheet and the 2027 cash flow. We will bring the budget and the structure. Talk with an ag lender
Keep reading: farm succession planning in Minnesota, and ag lending basics for farmers and agribusiness owners.
Growing, together.
Cost, price, rent and income figures are from the 2025 Minnesota State Farm Business Management reports published by the Minnesota State Agricultural Centers of Excellence; per acre figures are southern Minnesota cash rent averages (1,017 corn farms, 921 soybean farms) and are rounded. Crop condition references are to USDA National Agricultural Statistics Service Minnesota crop progress reports through August 31, 2026. FSA guarantee limits are as published by the Farm Service Agency for the current federal fiscal year and adjust annually. Loan terms described are general practice and every loan is subject to credit approval. Nothing here is tax, legal or marketing advice; work with your tax preparer and your grain marketer on your own situation. Page last reviewed September 2026.