Corn Belt farmland loses real value, and the cheapest soil fix is the one hardest to afford

The ground under the balance sheet

The Federal Reserve Bank of Chicago published its second-quarter farmland survey this week, and the headline number was a flat one. Values across the Central Corn Belt were unchanged from a year earlier, the slowest growth since late 2024 [1]. Take inflation out and flat becomes a fall. District farmland lost 3.7% of its real value year on year, the largest such decline since the third quarter of 2016 [1].

The mood underneath is worse than the price. Only 5% of the agricultural lenders surveyed expect land values to rise this quarter [1]. Forty-three percent now call farmland overvalued, and not a single respondent called it undervalued [1]. Purdue’s monthly farmer survey moved the same way, its short-term farmland expectations index sliding from 124 in June to 119 in July [1].

Credit is where strain shows first. The share of farm loans in the district with major or severe repayment problems reached 3.7% this year, up from 2.9% a year ago and the highest since 2020 [1]. That is a second, unrelated 3.7% in the same report: one is the real fall in land value, the other the share of troubled loans. Farm bankruptcy filings rose in both 2024 and 2025, reversing an improvement that had held since a 2019 peak [2]. Bankruptcy is a lagging measure. By the time a farm files, it has usually already refinanced and sold what it could [2].

One odd thing is propping land prices up. Several lenders told the Chicago Fed that investment in data centres, solar and wind farms was helping hold agricultural land values steady [1]. One Wisconsin lender asked the obvious question: what happens when that outside pressure fades [1].

Corn cured its own glut, and the cure hurt

The arithmetic behind the squeeze is plain. The United States grew a record 17-billion-bushel corn crop in 2025 [3]. This year’s is put at 16 billion, against demand of 16.33 billion for the 2026/27 marketing year [3]. Leftover supply at the year’s end is forecast to fall from 1.945 billion bushels to 1.653 billion, a drop of 15% [3]. Low prices did what low prices do. They cured themselves by pulling buyers back in, and they hollowed out farm income on the way [3].

The crop itself is not comfortable. Pro Farmer’s crop tour counted 1,318.64 soybean pods in a three-by-three-foot square in Indiana this week, down from 1,376.59 a year ago [4]. It put Indiana corn at 183.5 bushels an acre against 193.8 last year [4]. Nebraska looked worse, with soybean pods down almost 10% and corn at 163.6 bushels an acre against 179.5 [4].

Ohio spent the week under water. Growers there had 0.9 days suitable for fieldwork in the week to 16 August, down from 5.2 the week before and 6.3 a year earlier [5]. USDA rated 52% of the state’s topsoil as having surplus moisture [5]. “Some localized areas are still underwater,” said Jacob Foote, an agronomist working with Ohio growers [5]. He also reported gray leaf spot and other leaf diseases becoming more noticeable [5]. Nationally, ten of the top 18 corn states reported no mature corn at all, though only one is genuinely behind its usual pace [6].

Not all of it is bad. Iowa is forecast at 216 bushels an acre, six above last year, and Illinois at 212 [7]. December Chicago wheat firmed to $6.75 a bushel and Kansas City wheat to $7.47 [8]. Argentina exported a record 5.14 million tonnes of corn in July, its biggest month ever [9]. USDA’s first survey-based soybean yield estimate came in at 52.7 bushels an acre [10].

Nitrogen priced off a war

The one input a grain farmer cannot simply drop is nitrogen. It makes up almost 80% of the air, but plants cannot use it in that form [11]. The Haber-Bosch process converts it by combining it with hydrogen under very high heat, and research suggests roughly half the world’s population is fed because of synthetic nitrogen fertiliser [11].

That process runs on natural gas, both for the energy and for the hydrogen itself [11]. So fertiliser prices track gas prices closely, and Russia’s invasion of Ukraine and the war with Iran have pushed both up [11]. Reuters this week described farmers already grappling with fertiliser and diesel price shocks from the conflict [12]. Forecasters warned in the same piece that a strengthening El Nino could become a very strong event, disrupting rainfall worldwide [12].

Ten years of plots in western Canada

The quietest paper of the week answers the fertiliser question sideways. Scientific Reports published a study on 18 August built on ten years of experimental plots, 2013 to 2023, in the Peace River region of western Canada [13]. Eight cropping sequences were tested against three nitrogen rates: none, 45 and 90 kilograms per hectare [13].

The result was lopsided. Diversifying the sequence with legumes and perennials improved the soil’s clumping, its water-stable structure and its enzyme activity [13]. Nitrogen fertiliser had no measurable long-term effect on any of those [13]. A turfgrass-to-legume sequence raised the soil’s average clump size by 87% against a conventional annual rotation, and an annual-to-perennial sequence raised it by 29% [13]. Sequences that included fescue raised water-stable large clumps by up to 57% [13].

The authors’ own framing matters as much as the numbers. Greater rotational diversity reduces weed, pest and disease pressure and improves how efficiently inputs are used [13]. They also note plainly that cropping choices turn on production costs and market forces, which can constrain what a farm does with its ground [13].

What stands in for rotation, and what is being taken away

Where a break crop is skipped, chemistry fills the gap, and the chemistry is narrowing. California’s pesticide regulator said on 10 August that it would phase out paraquat, a widely used weedkiller that studies increasingly associate with Parkinson’s disease [14]. Syngenta stopped producing it in March after thousands of lawsuits, Vermont banned it in May, and a cross-party bill to ban it nationally was filed in June [14]. Federal regulators have so far declined to act [14].

Resistant weeds are also pushing farms toward targeted sprayers. Scott Arthaud, who grows wheat, corn, milo, sunflowers and sesame in the Oklahoma Panhandle, said broadcast spraying had become “cost prohibitive” with high rates and expensive mixes [15].

There is public money for the older answer. USDA’s conservation service launched a $700 million Regenerative Pilot Program in December 2025, bundling cover cropping and rotational grazing into whole-farm plans [16]. Alabama’s signup deadline for next year’s assistance programmes is 25 September [17].

What pulls land the other way

Fuel policy keeps pulling ground toward a single crop. In the 20 years since ethanol production took off, North Dakota has gone from under half a million acres of corn to 4.5 million [18]. The House has passed a bill allowing year-round sales of a 15% ethanol blend [18]. Senate leader John Thune says it lacks the votes without concessions to small refiners [19]. Meanwhile total US cropland fell to 377 million acres in 2022, its lowest since the federal series began in 1945 [20].

Europe’s harvest, and the wider week

Europe is having a different kind of bad year. Successive heatwaves and a continent-wide drought have left growers in what producers call an unprecedented crisis [21]. French vegetable shortfalls run from 25% for courgettes to as much as 100% for artichokes [21]. Milk yields are down 10% to 15%, and hay for winter feed is about 30% below the 1989-2018 average [21]. The French agriculture ministry projects a 35% fall in the maize crop, while analysts at Expana and Argus expect closer to half [22]. Part of that fall is farmers switching land to other crops such as sunflowers, which is rotation forced by weather rather than chosen [21].

Britain faces potentially its worst cereal harvest since detailed records began, with grass growth “completely stalled” on many farms [23]. Cider apples are the exception, smaller and sweeter than usual [23].

At the till

Shop prices are easing even as the farm squeezes. UK food inflation fell to 1.3% in July, its lowest in close to five years [24]. Overall UK inflation still rose to 2.9%, on a 13% jump in the energy price cap [24]. Grocery price inflation eased again in August to its lowest since October 2024 [25]. In the United States, retail sales fell 0.6% in July, the first decline in nine months [26].

Food safety had a hard week on both sides of the Atlantic. One person died and more than 200 fell ill in a UK salmonella outbreak that officials have linked to imported eggs [27]. In the US, the FDA reclassified a Midwest Poultry Services recall as Class I, its highest risk level [28]. The recall covers nearly 1.6 million dozen eggs, or about 19 million individually, tied to nearly 100 cases across 17 states and 26 hospitalisations [28][29].

Elsewhere: Tyson will close beef plants in Illinois and Utah and sell one in Washington, citing one of the most severe cattle shortages the country has seen [30]. The FAO reported that only 448 hectares of Gaza’s cropland, about 3%, remain both reachable and undamaged, down from 601 hectares last October [31]. And dairy feed is quietly becoming the main market for high-oleic soybeans, at roughly 40% of demand from the 2024 crop and a projected 60% by 2027 [32].