CHICAGO, Ill. (RFD-TV) — Midwest farmland values continued rising in the third quarter even as agricultural credit conditions weakened across the Federal Reserve Bank of Chicago’s Seventh District.
The Chicago Fed reports values for good farmland increased 4% from a year earlier and 2% from the second quarter. Indiana, Iowa and Wisconsin posted year-over-year gains, while Illinois was unchanged.
Credit conditions remained under pressure. Demand for non-real-estate farm loans increased for the 12th consecutive quarter, while repayment rates declined for the 12th straight quarter. Renewals and extensions also remained elevated, and 23% of lenders reported requiring more collateral.
Average interest rates rose to 7.41% for operating loans, 7.47% for feeder cattle loans and 7.27% for farm real estate loans. Lenders also expect weaker farm earnings and more distressed asset sales during coming months.
Most bankers expect farmland values to remain stable through year-end, but weaker farmer demand and stronger nonfarm investor interest could shape land markets into 2027.
