CHICAGO, Ill. (RFD News) — Midwest farmland values were unchanged from a year earlier during the second quarter, while agricultural credit conditions weakened. Federal Reserve Bank of Chicago lenders reported flat values for good farmland, the slowest year-over-year growth since late 2024.
After adjusting for inflation, farmland values fell 3.7%, the largest real decline since 2016. Illinois and Iowa values increased, while Indiana and Wisconsin declined. Datacenter, solar, and wind development helped support some land markets.
Farm repayment problems also increased. Loans with major or severe repayment problems accounted for 3.7% of agricultural portfolios, the highest level since 2020, while renewals and extensions remained elevated.
Average operating loan rates were 7.12%, feeder cattle loans 7.14%, and farm real estate loans 6.79%. Lenders also reported greater collateral requirements and more operating and mortgage lending than normal.
Looking ahead, most bankers expect farmland values to remain stable, but 14% anticipate declines. They also expect stronger demand for operating and feeder cattle credit while machinery, grain storage and real estate lending weaken.
