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 Jun. 15, 2026
By Gerald Mashange, Department of Agricultural and Consumer Economics, University of Illinois Urbana, IL - Agricultural credit conditions in Illinois showed signs of strain in the first quarter of 2026. Although loan demand remained elevated, repayment rates deteriorated, and collateral requirements remained tight across the two Federal Reserve districts that serve the state. Average fixed interest rates on farm operating and real estate loans were lower than a year earlier, but the broader survey measures point to tighter credit conditions at the start of the year. Today's farmdoc daily article uses data from the Federal Reserve District Surveys of Agricultural Credit Conditions, which compiles quarterly responses from commercial banks within each participating Federal Reserve district. Because Illinois is served by two districts, our analysis only focuses on the Federal Reserve Bank of Chicago, which covers northern and central Illinois, and the Federal Reserve Bank of St. Louis, which covers southern Illinois. Loan Demand Remained Elevated Figure 1 shows the diffusion indexes for loan demand. A value of 100 represents no change from the same quarter last year (neutral), with values above 100 indicating an increase, and values below 100 indicating a decrease. Loan demand remained above 100 in both districts in the first quarter of 2026. In the Chicago district, the loan demand index was 141, slightly below 143 in the first quarter of 2025 but still well above 100. The latest reading continued the pattern of stronger loan demand observed in the district since late 2023. The St. Louis district showed a larger year-over-year increase. Its loan demand index was 124 in the first quarter of 2026, up from 95 the same time last year. Overall, reports of stronger loan demand outnumbered reports of weaker demand in both districts in the first quarter. Repayment Conditions Remained Weak Figure 2 shows the diffusion index for farm loan repayment rates. The repayment indexes remained below 100 in both districts in the first quarter of 2026. In the Chicago district, the repayment index was 63, slightly above 61 in the first quarter of 2025 but still well below 100. The latest reading indicates that reports of weaker repayment rates continued to outnumber reports of stronger repayment rates. In the St. Louis district, the repayment index was 65 compared to 43 the same time last year. Reports of weaker repayment rates by bankers were less common than they were a year ago, but the index remained far below 100. Across both districts, the latest readings continued to point to weak repayment conditions. To read entire report, Click Here.
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