From Federal Reserve Bank of Chicago Agriculture Newsletter
The Federal Reserve Bank of Chicago says while farmland values continue to increase, there are signs of moderation. For the first quarter of 2013, agricultural land values appreciated 4 percent in the district from the fourth quarter of 2012. They are up 15 percent from the first quarter of a year ago. Cash rental values are up 11 percent for the year.
Demand for farmland is good, the number of farms sold, the amount of acreage sold and the amount of land for sale rose over the winter months.
Agricultural credit conditions improved for the quarter as well, 61 percent of the banks responding said they had more funds available and only 1 percent said they had less. 47 percent of the banks responding reported higher rates of repayment and 35 percent reported fewer loan renewals and extensions. 46 percent of the bankers noted lower demand for non-real estate farm loans and 13 percent reported higher demand. The average loan-to-deposit ratio is the lowest it has been since 1994, 89 percent of the District’s banks say they are below the desired level of lending.
Change in agricultural land value by state compared to the previous quarter and a year ago:
- Illinois +5% +19%
- Indiana +4% +15%
- Iowa +3% +20%
- Michigan +12% +24%
- Wisconsin 0% -3% *
*although southeastern Wisconsin saw +7% for the quarter and +3% for the year, it was not enough to offset the decline in the northwestern-half of the state.
Rental rates in 2013 compared to 2012 by state:
- Illinois +9%
- Indiana +11%
- Iowa +13%
- Michigan +2%
- Wisconsin +12%
Read the Federal Reserve Bank of Chicago Ag Letter here:
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