Each year the Farm Credit Illinois (FCI) appraisal team evaluates the same 22 benchmark farms throughout its 60-county territory based on the land’s productive index (PI) rating, as calculated by the University of Illinois’ Bulletin 811. Based on individual PI ratings, farms are divided into four categories: 1A, 2B, 3C Central, and 3C South. The study compares July 1 values from year-to-year.

Farmland Average Decreases in 2025

According to Farm Credit Illinois’ annual benchmark study, farmland values in the central and southern 60 counties of Illinois decreased for the first time since 2018. On average, the benchmarks were down 4.41% across the territory.

As seen in Figure 1, land values had a dramatic run-up beginning in 2003 until peaking in 2014. The first decline in more than a decade began in 2015, continuing a slight decline through 2018. From then, land values increased again for six consecutive years and set new highs in 2024.

Figure 1

Figure 1: FCI’s average benchmark study results by land class on July 1, 2000-2025. Source: FCI 2025 farmland value benchmark study

The 2025 study reflected an average decline of 4.41% with 14 of 22 benchmark farms decreasing in value.

Results across all land classes showed considerable variation, reinforcing that agricultural real estate is a location-specific asset. When considering the individual benchmark values, the year-over-year percentage changes ranged from -13.64% to +27.39%.

Table 1 illustrates the average changes in the four general land classifications. Class 1A and 2B benchmark farms are mostly located in northern Illinois, whereas the Class 3C farms are in both northern and southern Illinois. These farms are tracked separately based upon location. Benchmark farms are plotted and categorized by land class on the map in Figure 1.

 Table 1

Table 1: Average percent change in overall value since 2024 by land class. Source: FCI 2025 farmland value benchmark study

Commodity Prices in Relation to Land Values

Commodity prices began to decline in the second half of 2023, leading to reduced net farm income for the 2024 crop year. Continued low prices are expected to negatively impact the current crop year. Figures 2 and 3 demonstrate the relationship between land values and corn and soybean prices

Figure 2 

Figure 3

Other Factors Affecting Land Values

Farmland transaction volume decreased slightly, however, demand for Illinois farmland continues to remain stable for the available supply of farms for sale. Buyers are a mix of operating farmers, retired farmers, and local farmland investors.

Over the past several years, strong commodity prices paired with Market Facilitation Payments and coronavirus assistance programs from the federal government helped stabilize balance sheets, increase working capital, and create a more positive outlook in agriculture. However, current commodity prices are low in comparison to recent years. These low prices coupled with high interest rates have decreased net farm income and negatively affected working capital.

Crop conditions throughout the FCI territory are mixed. Overall, north and central Illinois is experiencing better conditions than southern Illinois. Illinois corn conditions reported by the USDA show 17% Excellent, 52% Good, 22% Fair, 5% Poor and 4% Very Poor. Soybeans are rated at 15% Excellent, 48% Good, 26% Fair, 7% Poor and 4% Very Poor. 

Cash Rental Trends

Cash rents increased over the past several years until stabilizing in 2024. With lower commodity prices and net farm incomes, cash rents slightly decreased for the 2025 crop year. As illustrated in Table 2, average changes in the four land classes were unchanged to slightly down. In conducting the benchmark study, the rates used looked at the overall picture from the past year and looked forward into cash rents that will be negotiated this fall. As for next year, it is likely the downward trend will continue due to the overall decline in the ag economy. However, historically, fluctuations in cash rents lag behind corresponding changes in land price.

Table 2 

Table 2: Average percent change in overall cash rent since 2024 by land class. Source: FCI 2025 farmland value benchmark study

Summary

The 2025 benchmark update for the Farm Credit Illinois territory shows a decrease in the farmland market for the first time since 2018. Fourteen of the 22 benchmark farms decreased in value, six increased, and two remained unchanged. This variability in values throughout the FCI territory reinforces that agricultural land is a location-specific asset.

The economic health of farmers and farm owners is weakened due to economic pressures on farmers’ financial positions. Higher interest rates, elevated input costs, and sustained low commodity prices have collectively contributed to the decline in farmland values.

Overall, a decrease of 4.41% indicates slight deterioration throughout FCI’s 60-county territory. This fall and winter are expected to bring additional challenges to the market that warrant careful monitoring for signs of further downward movement.

As farmers face economic volatility, it is especially important to engage in diligent communication with your lender to be properly supported through challenging times. Farm Credit is taking a proactive approach in sharing consultative expertise with members.