The rise in Northern Plains and Minnesota farmland values has moderated, according to the most recent reading of ag banker attitudes by the Federal Reserve Bank of Minneapolis. Its first quarter survey found the average district nonirrigated cropland values decreased by 0.7% from the first quarter of 2025. Irrigated cropland values continued to climb, increasing 1.4% from a year earlier, while ranch- and pastureland values climbed more than 3%, “likely due to continued profitability in cattle,” the bank states.
The bank serves both Dakotas, Minnesota, Montana and western Wisconsin.
Changes in land values were mixed across district states, the bank notes. Lenders in Minnesota and North Dakota report nonirrigated cropland prices fell, while lenders in other states report rising prices.
Farmland cash rents declined more uniformly, in contrast with land values, the bank states. District average cash rent for nonirrigated land fell by more than 2% from a year ago. Rents for irrigated land decreased 3%, while ranchland rents fell by 4.6%.
More than 75% of district agricultural lenders indicated incomes decreased in the first three months of 2026 compared with the same period a year earlier. Despite strong harvests in much of the district and relatively stable or somewhat improving crop prices at the end of 2025, incomes fell again in the recent quarter, the bank reports. “Even with record 2025 yields, grain farming is difficult,” comments a South Dakota lender.
Investment in equipment and buildings also fell, as 65% of respondents report decreased capital spending, compared with 4% who reported an increase. Household spending by farmers was flat on balance, though 65% of respondents reported no change.
Given constrained cashflow, bankers also reported that credit needs grew. Demand for loans increased in the first quarter from a year earlier according to 46% of respondents, compared with 13% who noted decreased loan demand. The uptick in loan demand came despite a slight increase in average interest rates for most loan categories since the fourth quarter of 2025.
Along with demand for loans, almost half of respondents say renewals or extensions of existing loans increased.
Financial difficulties have affected farmers’ ability to repay debt. Almost half of lenders report a decrease in repayment rates. Meanwhile, 24% of banks say they increased the amount of collateral required on farm loans.