For the first time in five years, the value of agricultural land in the Central Corn Belt declined annually. The Federal Reserve Bank of Chicago reports values in its district decreased 1% in 2024.
The decline ended a four-year run of substantial annual gains, it states. “Even so, values for ‘good’ farmland in the district moved up 1% in the fourth quarter of 2024 from the third quarter, according to the respondents from 133 agricultural banks who completed the January 1 survey. In addition, only 4% of the respondents expect farmland values to rise January through March, while 26% expect them to fall. The majority expect them to be stable.
For the first time in five and six years, Illinois and Indiana, respectively, had annual decreases in their farmland values. In addition, Iowa had a slightly larger single-digit annual decrease in its farmland values than in 2023. In contrast, Wisconsin had a single-digit annual increase in agricultural land values for 2024. A Wisconsin banker noted there was “still very little land available for sale.” District farmland values increased 1% from the third quarter of 2024 to the fourth quarter.
Adjusted for inflation by the Personal Consumption Expenditures Price Index (PCEPI), district farmland values decreased 3.4% in 2024, the first real decrease in five years and the largest real decrease since 2014. District farmland values edged down from their 2023 peak but were still 11% above their 2013 peak in real terms and up 43% from their 2013 peak in nominal terms.
District agricultural credit conditions continued to exhibit signs of deterioration during the fourth quarter of 2024, the bank states In the final quarter of 2024, repayment rates for non-real-estate farm loans were sharply lower than a year ago, plus loan renewals and extensions were noticeably higher than a year earlier. Nearly 2% of agricultural borrowers were not likely to qualify for operating credit at the survey respondents’ banks in 2025 after qualifying in the previous year. Non-real-estate farm loan demand relative to a year ago was up for the fifth quarter in a row.