The Chicago Federal Reserve Bank reported on the current economic conditions and trends in the northern two-thirds of Illinois and Indiana, southern Wisconsin, and all of Iowa and Michigan. This report includes comments on credit conditions, cash rents, and land values.
Land Values
In the first quarter of 2025, “Good” farmland rose 4% over the last quarter of 2024, with Illinois leading the way with a 5% increase. Current land values are 1% higher than for the first quarter of 2024. The supply of farmland for sale is generally down, and demand for land to purchase shows mixed signals.
Cash Rents
Reported cash rental rates for 2025 in the district were down 2%, corresponding with the Illinois figures. Iowa was down 3%, and Indiana was up 1% from 2024 in the Chicago Federal Reserve District. Though not reported by the Federal Reserve, flexible cash rental arrangements where the rents can "flex" higher depending on yield and grain prices continue to be strong in Illinois. Flex provisions are not in the 2025 cash rents.
Credit Conditions
Farmer repayment rates on loans declined in the first quarter of 2025. In general, the demand for loans increased. Most banks have more funds available for loans than one year ago. Loan interest rates are steady and down slightly.
Conclusions
The agricultural economic situation in Illinois remains soft but is broadly trending sideways. Farm producers must closely monitor their financial conditions and local and national developments. Cash reserve strength is essential in the future as we move through 2025. For more information, see the full report here: First Quarter Midwest Farmland Values Moved Up Slightly from a Year Ago - Federal Reserve Bank of Chicago