Central Corn Belt “good” farmland values saw a 1% increase from a year ago, and a 4% rise from the fourth quarter of 2024, according to a survey of agricultural banks conducted by the Federal Reserve Bank of Chicago.
Demand to purchase farmland was lower in the three- to six-month period ending with March 2025 than in the same period ending with March 2024. Some 15% of the survey respondents report higher demand to purchase farmland and 29% report lower demand.
The survey indicates the amount of farmland for sale was down during the winter and early spring of 2025 compared with a year earlier. Likewise, the number of farms and the amount of acreage sold were down in the winter and early spring of 2025 relative to a year ago.
In addition, the survey shows annual cash rental rates for district farmland saw a decrease of 2% in 2025 — their first decline since 2020. For 2025, average annual cash rents for farmland were down 2% in Illinois and 3% in Iowa and up 1% in Indiana and 3% in Wisconsin. (Not enough survey responses were received from bankers in Michigan to report a numerical change for that state).
District agricultural credit conditions weakened during the first quarter of 2025, the survey indicates. Repayment rates for non-real-estate farm loans were much lower in the January through March period of 2025 compared with a year ago and the renewals and extensions of these loans were higher. In the first quarter of 2025, demand for non-real-estate farm loans compared to a year ago was up for the sixth consecutive quarter, while the availability of funds for agricultural lending relative to a year earlier was down for the eighth consecutive quarter.
According to an Illinois banker, “working capital decreased dramatically in 2024 and probably will in 2025 as well.” With farms in need of more financial liquidity, survey respondents forecast the overall volume of non-real-estate farm loans will rise during the April through June period versus a year earlier. Some 36% of responding bankers expect a higher volume of such loans, while 16% expect a lower volume.
In the first quarter of 2025, 48% of survey respondents consider farmland to be overvalued, while only 1% consider it undervalued. Even so, more than two-thirds of the responding bankers expect farmland values to be unchanged in the second quarter of 2025: Specifically, 69% forecast agricultural land values to be stable, 25% forecasted them to decrease and just 6% forecast them to increase.