According to an August 18 report from the University of Illinois, over the past 10 years, average annual capital purchases on Illinois grain farms have exceeded average annual net farm income, with government payments included in income.
Generally, income from other sources has been used to fund farm-level capital purchases, much of which has been allocated to machinery, the authors state. Over time, machinery purchases then have resulted in growing machinery depreciation costs on a per-acre basis.
Average capital purchases on Illinois grain farms have declined from highs set in 2023, when capital purchases were $335,000 per farm. That high capital purchase value was associated with higher incomes in 2021 and 2022, when accrual net farm incomes averaged $446,000 and $505,000, respectively.
Higher capital purchases are often associated with higher net farm income, with capital purchases declining when net farm incomes decrease, often in a lagged fashion. Since 2023, capital purchases have declined to $236,000 in 2024 and $184,000 in 2025, corresponding to lower net farm incomes of $13,000 in 2024 and $93,000 in 2025.
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