Illinois Farm Financial Trends in 2024: Summary and Analysis

Farm incomes in 2024 were much lower than in 2023, resulting in weaker financial positions on Illinois farms (see farmdoc daily article from August 15, 2025).  The Farm Financial Standards Council has identified several key measures to analyze the financial strength of a farm business.  These measures are in the areas of liquidity, solvency, profitability, and financial efficiency.  The averages for these key measures for 2,084 Illinois farms enrolled in Illinois Farm Business Farm Management (FBFM) can be found in Table 1. These measures are also calculated by farm type.  Due to the effects that weather and other outside factors may have on a farm business for any one year, it is better to monitor these measures over time and to identify trends than it is to rely too heavily on these measures for any one year when making business decisions.  More detailed and in-depth analysis of these financial characteristics can be found in Financial Characteristics of Illinois Farms, published by FBFM and the Department of Agricultural and Consumer Economics at the University of Illinois.

The dataset includes 2,084 farms, with grain farms making up the large majority (2,006 farms). Smaller groups include 16 hog farms, 29 dairy farms, and 33 beef farms. This context is important because averages are heavily influenced by the dominance of grain farms.

Liquidity is an assessment of a farm’s ability to meet current cash-flow needs.  The amount of working capital and the current ratio (current assets divided by current liabilities) are two measures of liquidity.  The average amount of working capital as of December 31 for the 2,084 farms was $364,504 down 26 percent from $494,571 a year earlier.  Grain farms had the greatest working capital, averaging $372,213, while dairy farms had the least, averaging $157,412. Most assets on a dairy farm—such as the herd, buildings, and land are classified as noncurrent.  The average current ratio for all the farms was 2.46, down from 3.03 a year ago.  Dairy farms recorded the highest (most healthy) current ratio, and hog farms the lowest.  The current ratio for 2022 was the highest on recent record at 3.52, which was about 30% higher than in 2024.

Solvency is a measure of the farm’s overall financial strength and risk-taking ability.  The average net worth of the 2,084 farms at the end of 2023 was $4,472,445, up from $4,467,364 the year before. Average accrual farm and non-farm incomes in 2024 were not above family living requirements; however, the average net worth increased slightly, driven by higher machinery and land values that offset declines in current assets, mainly lower grain inventories due to lower prices.  Grain farms had the highest net worth, followed by hog farms, with dairy farms recording the lowest.  The debt-to-farm equity and debt-to-farm asset indicators show how debt capital is combined with equity capital.  This is useful in looking at the risk exposure of the business.  The average debt-to-farm asset percentage for all farms was 19.0.  The debt-to-farm asset percentage ranged from 16.1 for beef farms to 31.0 for hog farms.  The average debt-to-farm asset level of 17.8 from 2022 was at its lowest level for at least 20 years.  However, after two years of lower incomes, the average debt-to-asset level is 6.7% higher than in 2022.

A measure of a farm’s profitability is useful in examining its ability to meet family living demands and retire term debt.  It is also useful in measuring the farm’s ability to utilize assets and equity to generate income.  The average return on farm assets for the 2,084 farms averaged -0.5 percent, compared with 0 percent in 2023.  Dairy farms recorded the highest returns, averaging 5.2 percent, while grain farms recorded the lowest, averaging -0.6 percent.  Return on farm equity in 2024 ranged from 5.6 percent for dairy farms to -1.9 percent for beef farms.  The average was -1.7 percent, down from -0.8 percent in 2023.

Farm operating income is another important measure of profitability. In 2024, the average across all farms was –$12,383. Grain and hog farms showed the lowest values, while dairy farms averaged positive operating income of $143,738. These values illustrate the difficulty grain and hog farms faced in covering costs, while dairy farms fared better due to the much higher price of dairy bull calves.

The interest, operating, and depreciation expense ratios relate to these various expense categories as a percentage of the value of farm production.  The farm operating income ratio measures the return to labor, capital, and management as a percentage of the value of farm production.  These measures can be used to evaluate the financial efficiency of the farm business.  The interest expense ratio averaged 4.2 percent for the 2,084 farms, ranging from the highest at 7.7 percent for hog farms to 4.1 percent for grain farms. 4.2 percent was up 45% from 2.9 percent in 2023.  The farm operating income ratio ranged from a high of 25.6 percent for dairy farms to -1.4 percent for grain farms.  The average for all farms in 2024 was -0.8 percent, down from 4.2 percent in 2023. From 2020 through 2024, the five-year average farm operating income ratio was 18.2 percent. The 2024 farm operating income ratio was well below the five-year average and for the first time it has been negative in at least 30 years.

The depreciation expense ratio, averaging 11.7 percent across all farms, indicates the share of production value consumed by capital asset wear. Grain farms were near the average, while hog farms were lower at 7.5 percent. This reflects differences in machinery and facility investments between farm types.

The asset turnover ratio measures how effectively farm assets are used to generate income. The 2024 average was 0.19, with dairy farms showing higher turnover (0.23) compared to beef farms (0.13). This suggests that dairy and hog operations generally utilized assets more intensively than beef-focused operations.

The financial results on all Illinois farms show that on average 2024 was a poorer financial year due to lower incomes.  Most of the Illinois FBFM farms in this financial sort are grain farms.  Grain farms had their highest income ever in 2021 and 2022, leading to build ups of cash and other assets.  However, after two years of low incomes on grain farms, working cash has decreased almost 40 percent on the average farm to 2020 levels.  With projected continued lower incomes for the rest of 2025 and 2026 (see farmdoc daily article from August 19, 2025), farmers will need to find ways to reduce costs while making efficient use of assets.  Careful monitoring of these measures is essential in an environment of tighter margins to help make sound farm financial decisions for your operation.

The author would like to acknowledge that data used in this study comes from the Illinois Farm Business Farm Management (FBFM) Association. Without Illinois FBFM, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 5,000+ farmers and 70 professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM field staff provide on-farm counsel along with recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact our office located on the campus of the University of Illinois in the Department of Agricultural and Consumer Economics at 217-333-8346 or visit the FBFM website at www.fbfm.org.