What a Farm Storage Facility Loan costs, and who qualifies

A Farm Storage Facility Loan is a U.S. Department of Agriculture credit program that finances on-farm storage and handling equipment at up to $500,000 per borrower for facilities, with a 15 percent down payment and terms of three to 12 years. Rates ran 4.125 percent to 4.625 percent by term in August 2026, per the Farm Service Agency.

That is the whole answer to the financing question. The harder question is whether the bin earns its keep once it is standing, and that arithmetic is regional. Below is what the agency documents actually commit to, and what the published extension numbers say about the cost side.

What does the loan cover?

It covers the structure and the iron that moves grain into it. Eligible facilities include grain bins, hay barns, bulk tanks, cold storage, and hoop-style storage barns, new or used, permanent or portable, according to the Farm Service Agency's Farm Storage Facility Loan program page. Drying and handling equipment qualifies as well.

Storage and handling trucks carry their own cap of $100,000, separate from the $500,000 facility maximum. The eligible commodity list is long and not limited to row crops: grains, oilseeds, peanuts, pulse crops, hay, hemp, honey, renewable biomass, fruits and vegetables, floriculture, hops, maple sap and syrup, milk, cheese, yogurt, butter, eggs, unprocessed meat and poultry, rye, and aquaculture, per the same agency page.

There is a smaller door for operations that do not need $500,000 of concrete. Farm Storage Facility Loan microloans run to an aggregate balance of $50,000, require 5 percent down instead of 15 percent, and waive the standard three-year production history requirement, the agency says. In an August 27, 2025 program notice, the Farm Service Agency listed skid steers and specialized trucks among the handling equipment it will finance, and noted that controlled atmosphere storage had recently been added to the eligible list.

What does the money cost right now?

Rates are set monthly and step up with the term. For August 2026, effective August 1, the Farm Service Agency published the following Farm Storage Facility Loan rates in its August 3, 2026 lending rate announcement.

Loan term	Interest rate, August 2026
Three years	4.125%
Five years	4.250%
Seven years	4.375%
Ten years	4.500%
Twelve years	4.625%

For context in the same announcement: direct farm operating loans carried 5.250 percent, direct farm ownership loans 6.000 percent, commodity loans disbursed for less than one year 5.000 percent, and sugar storage facility loans at 15 years 4.875 percent. These are August 2026 figures and they reset monthly, so confirm the current number with your county office before you build a payment schedule around it.

What security will the agency ask for?

The dividing line is $100,000. Under 7 CFR part 1436, a loan of $100,000 or less — or an aggregate outstanding Farm Storage Facility Loan balance at or below that figure — does not require a real estate lien or a severance agreement from prior lien holders. Above $100,000, real estate liens are mandatory.

Between $50,000 and $100,000 the regulation leaves room for judgment: the Deputy Administrator may require a severance agreement or a real estate lien. Borrowers who would rather not encumber ground have two documented alternatives in the rule — raise the down payment from 15 percent to 20 percent, or supply an irrevocable letter of credit.

Insurance is not optional. The regulation requires all-peril structural insurance on the facility, flood insurance where the site sits in a flood plain, and the Commodity Credit Corporation listed as loss payee on the policy. Sugar storage borrowers must also insure contents annually.

How much storage will the agency finance?

Not as much as you might want to build. For most commodities, part 1436 sets the storage need by multiplying average acreage by a reasonable yield, doubling that for two years of production, and subtracting the storage capacity already on the place. Cold storage runs a similar calculation off production or acres over three years.

Sugar is handled differently, using the processor's projected processing volume and marketing allotments. Microloan applicants may be allowed to self-certify their storage need, the regulation says, which is part of what makes that tier workable for newer operations without a long production record.

Does the bin pencil out against commercial storage?

The published cost work is regional, and the most recent detailed set comes from Mississippi. In Mississippi State University Extension publication P4124, authors Steve W. Martin, Brian Mills, and Will Maples report local construction quotes of $4.00 to $4.50 per bushel gathered in fall 2024, excluding drying capacity. They cite University of Tennessee figures of $2.50 per bushel in 2022, roughly a 40 percent increase over that span.

Annualized, using 7 percent of establishment cost, the same publication puts ownership cost at $0.32 per bushel per year for a 60,000-bushel system, $0.30 at 80,000 bushels, and $0.29 at 120,000 bushels. Its comparison figure for commercial storage is about $0.05 per bushel per month, or $0.33 per bushel annually.

Read those side by side and the margin is thin on the fixed-cost comparison alone — which is why the publication is explicit that drying capacity falls outside its scope, and why it stops short of naming a price increase that would justify the investment. Those are Mississippi quotes at fall 2024 costs. Steel, concrete, and site work in your county will produce a different first number, and the annual cost per bushel moves with it.

What has to be in place before you apply?

Part 1436 lists the eligibility conditions plainly. Working through them before the county visit shortens the file.

1. A financial statement dated within 90 days of application, showing repayment ability, plus a satisfactory credit history.
2. No disqualifying delinquent federal debt.
3. Producer status for a commodity on the facility loan list.
4. Annual proof of crop insurance for economically significant crops and for all stored commodities.
5. Compliance with the highly erodible land and wetland conservation provisions.
6. Local zoning and building code compliance for the site.
7. All-peril structural insurance, flood insurance if required, with the Commodity Credit Corporation as loss payee.

The program is not a pilot. Marking its 25th year, the Farm Service Agency said in May 2025 that it had made more than 40,000 loans since the program began in May 2000, adding roughly one billion bushels of on-farm storage capacity over that period.

For a related industry news perspective, read Economic Benefits of a Sustainable Agricultural Revolution.