Illinois farmers are experiencing one of their toughest financial years in more than ten years, as soaring input costs, high interest rates, and volatile global markets continue to erode profits. While tariffs often steal the spotlight, agricultural experts warn that the real issues run much deeper.
Many growers across the state are finding that even with steady or higher crop prices, they are still losing money. David Yandell, regional vice president of operations for Illinois Farm Business Farm Management (FBFM), sees this challenge up close. FBFM, a nonprofit linked to the University of Illinois, helps thousands of farm families manage their finances and long-term planning.
Yandell acknowledges that tariffs—especially those impacting soybeans—have disrupted foreign trade, pushing key buyers like China to source more crops from countries such as Brazil. However, he says this loss is not permanent. “It’s not like we lost China altogether,” Yandell explained. “There was a market that went on hold, and it now appears to be coming back slowly.” He points out that China still depends on U.S. soybeans to meet its needs.
Yet, the main culprits behind today’s financial pain are sharply rising costs and record-high interest rates, not tariffs. “The long-term factors, such as high input prices and interest rates at an all-time high, are the real drivers to the lack of profitability,” Yandell emphasized. “The tariffs have some to do with it, but it’s not the main player.”
Economic data backs this up: Illinois net farm income has dropped dramatically over the past two years, farm equipment prices have soared since the pandemic, and interest rates on operating loans are at a two-decade high. Farmers are paying more for everything—fertilizer, seed, fuel, repairs, labor, and parts—with no sign of relief. “That is the strain they’re feeling,” Yandell said. “Those are the things driving the stress in today’s American farms.”
On top of that, working capital is dwindling, forcing many farmers to rely on costly loans just to keep going. “Working capital has been decreasing for three years,” Yandell said. “When you’re paying premium interest on those loans, it creates even more headwinds.”
Land prices are also fueling the pressure. Illinois farmland has reached record highs, making it more expensive to buy or rent. Outside investors, who see farmland as a safe investment, are pushing prices even higher. “Because land is seen as a safe investment, people buy it who may not understand farm economics,” Yandell noted. “That creates a headwind for producers.”
President Trump’s recent $12 billion farm aid package is aimed at helping farmers offset some of these financial blows, with most of the assistance expected to support major crops like corn and soybeans. Yandell says the payments will help, but they are far from a complete solution. “Most farmers would prefer to raise a crop and sell it at a profit without government assistance,” he said. “These payments will help, but the external factors are still there.”
Yandell also points to a common misconception: many assume farmers are wealthy based on the appearance of new equipment, but much of it is financed with significant debt. “There’s a perception that if equipment looks new, the farmer must have a lot of money,” he said. “But there’s a lot of debt tied to that. The financial implications are generations deep.”
Looking forward, Yandell stresses that successful farms are those that know their break-even costs, closely monitor debt, and keep detailed financial records. “Financial literacy has to go hand-in-hand with agronomy,” he said. “Those two things have to work together for long-term success.”