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Farmer loans available after USDA declares Northern MN drought disaster area

A farmer harvests wheat in a field.
Contributed
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USDA via Minnesota Department of Agriculture
The U.S. Department of Agriculture issued a disaster declaration in Koochiching County due to recent drought in August 2026.

The designation applies in Beltrami, Itasca, Koochiching, Lake of the Woods and St. Louis counties.

Northern Minnesota farmers may be eligible for loans after the U.S. Department of Agriculture declared Koochiching County and its surrounding counties as disaster areas due to ongoing drought.

Nearly half of the state is in a severe drought or worse, according to the U.S. Drought Monitor’s report on Aug. 27. Some areas are dealing with even worse conditions.

“Almost 4% of Minnesota is in D3 or extreme drought,” said Thom Petersen, Minnesota Department of Agriculture commissioner.

According to Petersen, a USDA secretarial disaster is triggered when an area reaches extreme drought, or D3, status. It can also be triggered when an area remains at a severe drought, or D2, for eight weeks.

“People always want the governor to declare a disaster for farm products, but that's not how it works. The disaster for farmers comes from the USDA. We request it and we work with them closely on it,” Petersen said.

With the declaration comes the opportunity for farmers to apply for Farm Service Agency disaster loans, or MDA disaster recovery loans. These offer low or no-interest financial support for farmers to keep their businesses afloat.

Farmers may need to pay for water storage, repair costs for overworked wells or extra hay during a drought.

Rachel Gray raises cattle near Blackduck. She noted that although the loans can take some financial pressure off farmers, they don’t cover all additional costs needed to manage drought conditions.

“Disaster recovery is kind of a Band-Aid. It never will make you whole,” she said.

In a previous drought, Gray sent some of her cattle to temporarily stay in a less impacted part of the state. Some farmers opt for destocking — selling some of their cattle to manage in drought conditions, including weaning calves early to get them sold sooner.

Droughts impact farmers’ ability to source all foods — from beef and pork, to corn and wheat. According to Gray, every protein source and crop across the board is affected.

Rachel Gray stands on one of the pastures at Little Timber Farms north of Blackduck on April 18, 2025.
Larissa Donovan
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KAXE
Rachel Gray stands on one of the pastures at Little Timber Farms north of Blackduck on April 18, 2025.

If you’re noticing that your yard is dry and hard to keep watered, the same thing is happening to farmers’ crops and fields.

Gray said she wants consumers to know that agricultural producers like her are doing their best to provide a healthy product for grocery store shelves.

“We're all in this business because we love to grow food, and the end goal is to make sure that everybody is fed and that our food is economical and safe and on the shelves when you need it,” Gray said.

Farmers have a year after the designation to apply for loans.


Stella Mayerhoff is a Report for America corps member, covering Minnesota’s headwaters region for KAXE in Grand Rapids, Minnesota. Report for America places talented journalists in local newsrooms to report on under-covered issues and regions.

Stella Mayerhoff is a scientist-turned-journalist. She joined KAXE in July of 2026 as a Report for America corps member, and covers Minnesota’s headwaters region in partnership with the Mississippi River Basin Ag & Water Desk.
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