Farmland Values in These States Keep Growing

Three of the four states in the Seventh Federal Reserve District saw agricultural land values increase year-over-year in the third quarter of 2026, according to the Federal Reserve Bank of Chicago’s latest “AgLetter.”

AgLetter surveys responses from Farm Credit System institutions and commercial banks in the Seventh Federal Reserve District.

Ag land values increased 4% overall in the District, according to the report. That represents the biggest increase out of the three quarters so far this year. Wisconsin saw the largest year-to-year land value increase compared to the other states with an eight-point jump.

Iowa showed the second-largest increase with 6%. Indiana nudged up 1% year-to-year. Illinois was flat over the past 12 months.

Not enough people responded in Michigan, so AgLetter could not provide data for the state.

Why Are Farm Credit Conditions Weakening in the Seventh District?

The AgLetter data showed the continued financial strain for some producers. District agricultural credit conditions worsened over the third quarter, according to feedback about repayment rates for non-real-estate farm loans. That marks the 12th quarter in a row of lower rates.

The third quarter also brought the 12th straight quarter for higher demand for non-real-estate farm loans. While demand kept rising, the dollars available continued to fall. For the 14th quarter in a row, the report showed that the availability of funds for agricultural lending was lower compared to the previous year.

The AgLetter’s authors wrote, “Twenty-one percent of survey respondents anticipated a lower volume of farm loan repayments over the next three to six months relative to a year earlier (13% predicted a higher volume).”

The authors also noted that respondents expected economic stress to increase in the fourth quarter. “Unsurprisingly, given lower crop and livestock income expectations, forced sales or liquidations of farm assets owned by financially distressed farmers were anticipated to rise in the next three to six months relative to a year ago; 31% of the responding lenders projected them to increase, while 8% projected them to decrease.”

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Farm Income Fell but Expected to Rise Later in 2026

Slightly more than half of agricultural lenders surveyed throughout the Federal Reserve Bank of Minneapolis in the latest AgCredit Survey said farm incomes fell in the third quarter compared to the previous third quarter. Although, they expect farm incomes to increase in the fourth quarter.

Farmers and ranchers are pulling back on spending on equipment and building investments compared to a year ago. But they are spending more on farm households as costs rise.

Operating costs for cattle ranchers have limited income possibilities despite strong prices. “Although cattle producers are benefiting from strong livestock prices, rising operating costs continue to pressure overall profitability,” a Montana lender reported to the Ag Credit Survey.

The challenging financial climate led to 34% of respondents reporting an increase in loan renewals or extensions, while just 5% reported a decline in demand.

Rising collateral requirements also added to difficulties.