Chicago Fed: Farmland Values Hold Steady Across Midwest
Every three months, the Chicago Federal Reserve Bank releases a snapshot of farmland values and agricultural credit conditions across its Seventh Federal Reserve District, which includes Iowa, Illinois, Indiana, Wisconsin, and Michigan.
The latest survey shows farmland values were essentially unchanged during the second quarter of 2026.
Are Farmland Values Staying Flat in the Midwest?
According to the Chicago Fed, farmland values across the five-state region were unchanged in the second quarter of 2026 compared to the same period a year earlier.
The findings are based on responses from 79 agricultural lenders throughout the district.
The lack of growth marks the slowest year-over-year change in farmland values since the fourth quarter of 2024, according to the Chicago Fed's report.
The Fed also reported that values for "good" agricultural land were unchanged from the first quarter of 2026 to the second quarter, indicating little movement in the market over the past six months.
How Do Farmland Values Differ by State?
While overall farmland values across the district were flat, the report showed notable differences among individual states.
According to the Chicago Fed, Iowa and Illinois posted year-over-year increases in farmland values.
Meanwhile, Indiana and Wisconsin experienced year-over-year declines.
How Is Inflation Affecting Farmland Values?
When adjusted for inflation, the picture was somewhat less stable.
The Chicago Fed reported that real farmland values declined 3.7% from a year earlier. The decrease was the largest year-over-year drop in inflation-adjusted farmland values in the district since the third quarter of 2016.
Several lenders surveyed by the Chicago Fed pointed to continued investment activity related to data centers, solar projects, and wind energy developments as factors helping support agricultural land values.
Those alternative land uses have created additional demand for land in some areas, helping offset pressure from weaker farm profitability.
Why Are Agricultural Credit Conditions Weakening?
The Chicago Fed said agricultural credit conditions across the district weakened during the second quarter of 2026 compared to a year earlier.
One Iowa lender told the Fed that "commodity price volatility and elevated production expenses are the factors weighing most heavily on credit conditions."
The share of farm loans with "major" or "severe" repayment problems rose to 3.7% of agricultural bank loan portfolios, up from 2.9% a year earlier. According to the Chicago Fed, that was the highest level recorded since 2020.
At the same time, the share of farm loans with no repayment problems declined to 88.5%, down from 90.1% a year ago.
The report also found that repayment rates for non-real-estate farm loans declined compared to a year earlier, while renewals and extensions of those loans increased.
Are Farm Operating Loans on the Rise?
According to the Chicago Fed, lenders reported making more farm operating loans and farm mortgages than normal during the first half of 2026.
Survey respondents also indicated that Farm Credit System institutions, merchants, dealers, and other agricultural input suppliers provided more financing than normal to the farm sector. In contrast, life insurance companies were reported to have lent less than usual.
Lenders across the district also said collateral requirements were higher than a year ago.
Survey respondents generally expect demand for non-real-estate agricultural loans to increase compared to year-earlier levels. That category includes operating loans, feeder cattle loans, and loans guaranteed by the Farm Service Agency.
At the same time, lenders expect lower volumes of farm machinery loans, grain storage construction loans, and farm real estate loans than were seen during the third quarter of 2025.
What Do Lenders Expect for Future Land Values?
Most lenders surveyed by the Chicago Fed do not expect significant changes in farmland values during the third quarter of 2026.
Only 5% of respondents anticipated farmland values would increase, while 81% expected values to remain stable and 14% expected values to decline.
The survey also found that 43% of lenders viewed farmland as overvalued, while 57% said land values appeared appropriately priced.
As one Wisconsin lender told the Chicago Fed, "At some point farmland values should plateau as outside pressure from solar and data centers subsides."
