Land in this part of Minnesota rarely comes up twice. When the neighbor's quarter goes to auction, the operation that already knows what it can pay per acre is the one that can bid with confidence. Financing a farmland purchase is decided long before the auctioneer starts: by the operation's balance sheet, by how much equity goes in, and by whether the payment fits a cash flow built on today's prices. Here is what farmland costs in our counties now, what the payment looks like next to cash rent, how a lender looks at a land purchase, and the programs that help a first purchase work.
Every farmland sale in Minnesota is reported to the county, and the University of Minnesota's Minnesota Land Economics database collects them. The average sale price per acre in the six counties where we do the most ag lending:
| County | 2020 average per acre | 2024 average per acre | Sales in 2024 |
|---|---|---|---|
| McLeod | $5,005 | $9,439 | 26 |
| Carver | $7,845 | $10,476 | 6 |
| Sibley | $6,514 | $10,378 | 11 |
| Renville | $6,641 | $9,820 | 42 |
| Meeker | $4,785 | $8,633 | 16 |
| Isanti | $3,751 | $7,398 | 9 |
Land in McLeod, Meeker and Isanti counties sold for 80 to 97 percent more per acre in 2024 than in 2020. Renville, the busiest market of the six with 42 sales, came off its 2023 average of $11,079. A handful of sales a year can swing a county average, so read the thinner years, like Carver's 6 sales and Isanti's 9 in 2024, as a range rather than a price. The run up has slowed. In the Minneapolis Fed's first quarter 2026 ag credit survey, lenders reported nonirrigated cropland values across the district down 0.7 percent from a year earlier, with Minnesota among the states where prices fell. That is a flatter market than the last five years, not a falling one, and it is a better market to buy in with a plan than one that is running.
The clearest way to think about a farmland loan is to set the annual payment beside the cash rent you pay on ground you already farm. Take an 80 acre parcel at $9,400 an acre, close to the McLeod County average, for $752,000. At an illustrative 6.8 percent fixed rate, which is the average farm real estate rate lenders across the district reported in that same survey, here is the annual principal and interest per acre:
| Annual payment per acre, $9,400 land, 6.8% (illustrative) | 20 years | 25 years | 30 years |
|---|---|---|---|
| 20% down ($7,520 financed per acre) | $699 | $634 | $594 |
| 30% down ($6,580 financed per acre) | $611 | $554 | $520 |
| 40% down ($5,640 financed per acre) | $524 | $475 | $445 |
| Cash rent, 2025 southern Minnesota FBM average | $257 | $257 | $257 |
With 30 percent down on a 25 year schedule, the payment is $554 an acre, a little over twice what the same ground would rent for. Put it in bushels and it is plainer still: at $4.00 corn, the payment takes 139 bushels off every acre, where cash rent takes 64. That is before property tax, which a renter does not pay.
Anyone who has bought ground already knows this. At today's values, farmland does not pay for itself from its own crop in the early years. It is carried by the whole operation: the margin on the rented acres, the equity already built, and in many young operations an off farm paycheck. Two things make that worth doing. The principal share of the payment, $107 an acre in the first year of that example, is not a cost. It is savings the operation keeps in the ground. And over the years, owned land becomes the equity that backs everything else the operation borrows for. The way I would frame it: the question is not whether the parcel cash flows on its own. It is whether the operation carries it through a bad year without the operating line paying for the land.
We treat farmland as income producing land, and our agricultural lending team builds the structure around what the ground and the operation produce, not around what the market did last year. In practice a lender is working through four things.
The operation's cash flow with the new acres in it. Next year's projection, family living included, with the land payment added and the rent on those acres taken out if you were already renting them. If the projection works in an ordinary year and survives a tight one, the rest of the conversation is about structure.
The equity going in, which does not have to be cash. Many of the farmers we lend to do not make the down payment in cash. They pledge acres they already own, and the equity in that ground serves as the down payment on the new parcel. Equipment owned free and clear can do the same work. However it comes in, more equity lowers the payment, as the table shows, and it is what keeps the loan sound if land values soften after you buy.
What the ground is worth to a lender, which can differ from what it brings at auction. A lot of banks, including ours, put a limit on how many dollars per acre they will finance, and that limit varies by area. If the bidding runs past it, the difference has to come from somewhere else: more equity, other acres pledged, or a lower top bid. The discipline behind those limits came out of the 1980s, and the ag lending page says why. The time to find out where the limit sits for the parcel you want is before the sale, not after the hammer falls.
The term and the amortization. Land is held for generations, and a payment set on too short a schedule can squeeze the operating line for a decade. Terms and amortization are set to the operation, and your lender walks through what the structure looks like before you commit to anything.
Watching a parcel you would like to own? Bring the balance sheet and the parcel description, and we will run the payment against your operation. The first conversation commits you to nothing. Talk with an ag lender
A lot of the farmland in our counties changes hands at auction, and auction terms are written for the seller. Earnest money is usually due the day of the sale, closing follows within weeks, and the terms of sale commonly carry no financing contingency. Once the hammer falls, the purchase is yours whether or not the loan is in place. That is why the conversation with your lender belongs before the sale bill is printed, not the week of the auction.
Three things to settle ahead of time. First, read the terms of sale when the listing comes out, and note the earnest money and the closing date. Second, sit down with your lender with the balance sheet, three years of tax returns, and a cash flow that includes the parcel, so you both know what the operation supports, where the bank's per acre limit falls for that parcel, and what the structure would look like. Third, set your top bid per acre from the payment math before the sale, and hold to it. I would much rather help a customer plan for a parcel a year ahead than try to fit a loan to a price set in the heat of the room.
The first purchase is the hardest one to finance, because the equity is thinnest when the operator is youngest. Minnesota has more help for it than most people realize, and we use these programs as normal tools, not last resorts. If you are a beginning farmer, I would call the local FSA office and your lender in the same week, because these programs work best when both are in from the start.
The Farm Service Agency down payment program. A beginning farmer puts down 5 percent, FSA finances up to 45 percent of the purchase price directly, and a bank finances the rest. On the same $752,000 parcel, that is $37,600 down, up to $338,400 from FSA, and $376,000 from the bank. FSA's farm ownership loans also include direct loans up to $600,000 and repayment terms up to 40 years.
FSA guaranteed farm ownership loans. The bank makes the loan and the Farm Service Agency guarantees a portion of it, up to $2,343,000 as FSA publishes the limit today, adjusted each federal fiscal year. FSA also offers a guarantee on land contract sales up to $500,000, which can make a seller more comfortable carrying a contract for deed for a younger buyer.
The Minnesota Rural Finance Authority. Under the Beginning Farmer Loan Program, the RFA buys up to 45 percent of the bank's loan, to a maximum of $500,000, at a reduced rate, so the farmer's overall rate is a blend of the two. The borrower's net worth has to be under $1,069,000 in 2026, and the program asks for enrollment in Farm Business Management for the first three years. The RFA portion balloons at ten years. The RFA also runs an Aggie Bond program for beginning farmers.
Help from the seller's side. Minnesota's Beginning Farmer Tax Credit gives landowners a state tax credit for selling or renting farmland to a qualifying beginning farmer. If you are buying from a retiring neighbor or a family member, it is worth making sure the seller knows it exists. Family transfers have their own tools, and our post on farm succession planning in Minnesota covers them.
If you are comparing banks before a purchase, these are fair questions to ask any lender, including us:
Those are the questions we would want asked of us. If you already bank with us, the land conversation and the farm operating line renewal are the same conversation, and it is easier to have them together.
Agricultural lending has been a significant part of Security Bank & Trust Co. since the bank opened in Glencoe in 1935, and it still is. Our primary ag lenders are Adam Lindeman, Joel Ebert, Jon Dahlke, Eric Thalmann, Judy Meyer, Paula Schons and Jacob Vasek. Between them they finance farms across McLeod, Carver, Sibley, Renville, Meeker and Isanti counties, working from our offices in Glencoe, Brownton, Hamburg, Mayer and Cologne. They know the ground in their townships, and they will come out to walk the parcel with you. The lender who helps you plan the purchase is the same one who writes the loan and sits across the table at your next renewal. When land is headed to the next generation instead of the auction, our Trust and Wealth Management team administers farmland in trust from the same buildings.
It depends on the parcel, the price per acre, and the operation behind the loan, and it does not have to be cash. Many buyers pledge farmland they already own, and the equity in those acres serves as the down payment. Conventional farm real estate loans generally ask for more equity than the beginning farmer programs do. The Farm Service Agency down payment program asks for 5 percent from a qualifying beginning farmer, with FSA financing up to 45 percent and a bank the rest, and the Minnesota Rural Finance Authority participates in loans up to 90 percent of value. More equity lowers the annual payment and keeps the loan sound if values soften.
Yes, and it is common. Instead of a cash down payment, you pledge acres you already own as additional collateral, and the equity in that ground covers the down payment on the new parcel. The lender looks at the combined value of both parcels against the combined debt, along with the operation's cash flow. Every loan is subject to credit approval.
Yes, and it is the best time to. Most farmland auctions require earnest money on sale day and close within weeks, often with no financing contingency. Sitting down with your lender before the sale, with your balance sheet, tax returns, and a cash flow that includes the parcel, tells you what the operation supports, whether the bank's per acre limit affects how high you can bid, and what a structure would look like. Every loan is still subject to credit approval.
On $9,400 an acre land with 30 percent down, financed at an illustrative 6.8 percent over 25 years, principal and interest run about $554 an acre a year. With 20 percent down it is about $634, and with 40 percent down about $475. For comparison, 2025 southern Minnesota cash rent averaged about $257 an acre in Farm Business Management records.
It is a state program in which the Rural Finance Authority buys up to 45 percent of a participating bank's farm loan, to a maximum of $500,000, at a reduced interest rate. The borrower makes one payment to the bank. The program is open to borrowers with a net worth under $1,069,000 in 2026 who intend to farm as their principal occupation and who enroll in Farm Business Management for the first three years. The RFA portion balloons at ten years.
Farmland sales reported in McLeod County averaged $9,439 an acre in 2024 across 26 sales, up from $5,005 in 2020, according to the University of Minnesota's Minnesota Land Economics database. In 2024, Carver County averaged $10,476 across 6 sales, Sibley $10,378 across 11, Renville $9,820 across 42, Meeker $8,633 across 16, and Isanti $7,398 across 9. Individual parcels vary widely with soil quality, tillable acres, drainage and location.
If there is a parcel you have had your eye on for years, the time to run the numbers is now, while nobody is bidding. Bring the balance sheet and a rough idea of the acres, and our ag lenders will build the payment against your operation, look at which programs fit, and tell you where the structure lands. If the sale bill comes out next spring, you will already know your number.
Know your number before the auction. Bring the balance sheet and the parcel. We will bring the payment math and the structure. Talk with an ag lender
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Growing, together.
Farmland sale prices are county averages of reported per acre sale prices from the University of Minnesota Minnesota Land Economics database, farmland sales, 2020 and 2024, read September 2026; 2024 is the latest year the database carried on that date. Land value trends and the 6.8 percent farm real estate rate are from the Federal Reserve Bank of Minneapolis Ag Credit Survey for the first quarter of 2026. Cash rent is the 2025 southern Minnesota cash rent average from the Minnesota State Farm Business Management reports. Payment examples are illustrative, use a fixed rate for arithmetic only, exclude property tax and insurance, and are not a quote or an offer of credit; actual rates, terms and amounts vary. FSA and Rural Finance Authority limits and requirements are as published by those agencies in September 2026, adjust periodically, and are subject to agency eligibility and approval. Every loan is subject to credit approval. Nothing here is tax or legal advice; work with your tax preparer and attorney on your own situation. Page last reviewed September 2026.