The Federal Reserve Bank of Chicago says agricultural land values for the third quarter of 2025 are 3% higher than a year ago. The 7th District issued a report Thursday saying values are up from a year ago, but unchanged from the 2nd quarter of this year.
More than 100 agricultural bankers were surveyed in October, and results show farmland in Illinois, Indiana, and Wisconsin had year-over-year increases in value while Iowa had a year-over-year decrease in value. The bank says an increase in value from the second quarter to the third quarter for Illinois was offset by a quarterly value decrease in Wisconsin.
The Federal Reserve Bank says ag credit conditions softened further in the third quarter with lower repayment rates for the eighth quarter in a row. They also report stronger demand for non-real estate loans such as operating loans for a sixth straight quarter. Thirty-eight percent of the banks surveyed had lower repayment rates, yet only 19% of the banks reported having less money to loan. Twenty-one percent of the banks in the 7th District now require more collateral for loans than at this time last year.
Interest rates did go down some. As of October 1st, the average operating loan interest rate was 7.47%, 7.57% for feeder cattle loans, and 6.82% for farm real estate loans… which is the lowest rate for real estate since the end of 2022.
Net cash earnings for crop and dairy farmers are expected to go down in the next six months. Bankers also say forced sales or farm asset liquidations are expected to rise in the next three to six months.
