Emergency Storage Loans in North Dakota: How Much Do They Pay? Three Key Takeaways from Recent CAPTS Research

By Matthew Gammans

In June 2025, a powerful derecho-tornado system damaged or destroyed up to 80 million bushels of on-farm grain handling capacity in North Dakota. The losses left farmers vulnerable to post-harvest spoilage and forced sales at low harvest prices. In response, the Bank of North Dakota launched two emergency programs:

1. Temporary Grain Storage Support Program – supporting temporary grain handling solutions such as baggers, extractors, hopper bins, and rented facilities.

2. Facility Repair & Replacement Program – providing low-interest loans to rebuild long-term grain handling and related agricultural infrastructure.

   
   

Both programs offered fixed 2% interest loans over two years, helping farmers quickly recover critical infrastructure.

Our new CAPTS whitepaper, How Much Do Emergency Storage Loans Pay? analyzes how much these programs benefit farmers and how much they cost the state. Using a representative 2,000-acre farm (1,000 acres of corn and 1,000 acres of soybeans), we simulated scenarios comparing program participation with either no storage rebuilds or private financing at market rates (7%).

Three Key Insights

1. Emergency storage loans prevent major grain losses and unlock price premiumsWithout on-farm storage, farms face an estimated 10% spoilage risk and are often forced to sell grain immediately after harvest, missing seasonal price gains. Access to temporary storage through the state loan program prevented spoilage and enabled farmers to store grain for five months, capturing price lifts of $0.40 per bushel for corn and $0.50 per bushel for soybeans.

Result: A $150,000 temporary storage loan generated $67,000 in added farm revenue (mostly from avoided spoilage), four times the program’s cost to the state.

2. State financing creates lower borrowing costs than private loansWhen compared to private commercial loans (typically 7% interest), the Bank of North Dakota’s 2% fixed rate loans provided interest savings of approximately $15,000 per representative farm. While these savings primarily transfer state funds to farm operators, they support immediate liquidity needs following disaster events.

3. Long-term facility loans also deliver positive returnsThe Facility Repair & Replacement Program, which supports permanent grain handling infrastructure, yielded $7,900 in interest savings for our representative farm, roughly equal to the state’s fiscal cost ($7,600). Though smaller in scale, these loans help restore long-term capacity and resilience.

Key Takeaway

North Dakota’s 2025 Grain Storage & Facility Rebuilder Programs demonstrate how modest, targeted state intervention can produce large agricultural benefits in the wake of natural disasters. By bridging immediate storage gaps and lowering financing costs, these programs help stabilize farm income, reduce post-harvest losses, and protect regional grain markets.

Read the full whitepaper: https://ageconsearch.umn.edu/record/362809

Author and Contact Information:

Matthew Gammans - matthew.gammans@ndsu.edu