Farm Earnings Improve, but Tight Margins Remain

Illinois farmers saw their earnings improve in 2025, but the latest data shows that farm profitability remains well below recent averages.

A recent analysis from Farm Business Farm Management (FBFM) and the University of Illinois’ FarmDoc found that average returns to operators’ labor and management improved across every region of Illinois in 2025 compared with 2024. However, the average return remained negative at $23,191 – the third-lowest annual return of the past 10 years and $139,505 below the five-year average.

Production costs remain a significant challenge as fertilizer and pesticide costs remain well above those of five years ago. Compared to 2021, fertilizer costs increased 37%, pesticide costs increased 29%, and seed costs increased 18%.

These cost increases resulted in labor and management earnings for a grain farm averaging negative $25,273, despite a slight increase in average return per acre.

A recent study done by the National Corn Growers Association (NCGA) and American Soybean Association (ASA) found that recent improvements in commodity prices have not eliminated the financial pressures created by several years of tight margins.

NCGA economist Krista Swanson emphasized that higher corn prices today do not immediately resolve farm profitability challenges because farmers are managing overlapping production and cash-flow cycles.

An improvement from a difficult year does not necessarily mean a healthy bottom line for farmers. With earnings still well below recent averages, input costs and market opportunities will remain critical to farm profitability as harvest gets underway. IL Corn will continue to emphasize the need for lower input costs for farmer profitability.