Banks support rich legacy of region’s ag business

Editor's Note: This column was part of the July 30 Pulse sent to more than 13,000 email subscribers.Driving around southern Minnesota and northern Iowa these last two weeks, I am amazed at how good the corn looks! Most of the stalks are much taller than I am; the plants look thick and green. Like always, many areas could use more rain, but I haven’t seen evidence of drought. If conditions hold, the harvest will be bountiful, which can be both good and bad, depending on which side of the equation you rely on for your income!.The American Bankers Association recently published its annual report on Farm Bank Performance, and while both the number of farms and the number of bank charters steadily erodes, community banks still play a very important role in the finance of agriculture. Banks provide 35.7 percent of all farm loans in the United States, according to the ABA report – that’s $212 billion outstanding as of last Dec. 31.Small loans make up 33.2 percent of banks’ farm and ranch lending, with $71 billion in small and micro farm and ranch loans on the books at the end of 2025. Focusing on the fundamentals of credit, solid underwriting standards, and knowledge of the customer’s business, the nation’s 1,372 farm banks report strong asset quality and capital levels. Employment at farm banks grew 2.7 percent in 2025, adding some 2,000 jobs and employing more than 76,000 rural bankers. Employment at farm banks has grown by 23.6 percent since 2015.In the Corn Belt, which includes Iowa, Indiana, Minnesota and Wisconsin, farm loans made by the region’s 649 ag banks increased 5.8 percent in 2025 to $57.69 billion. Ag production loans rose by 6.74 percent from a year ago to $24.07 billion, while farmland loans rose by 5.13 percent to $33.61 billion. Median ROA at these banks was 1.18 percent, and median ROE was 11.80 percent.Despite growing challenges in the farm sector where farms are getting bigger and agriculture is getting more complicated, community banks still play an extremely important role. Click here to read the ABA report.