- The annual growth in agricultural land values was 12 percent in 2010 for the Seventh Federal Reserve District—the second-largest increase in the past 30 years.
- There was a 6 percent rise in the value of “good” farmland in the fourth quarter relative to the third quarter of 2010.
- District agricultural land values increased 6 percent from the third quarter to the fourth quarter of 2010. This quarterly gain matched the largest rise in any quarter since 1977.
- Iowa farmland values led the surge, closely followed by those of Illinois and Indiana.
- The principal driver of the current boom has been corn and soybean production.
- Since farmland values bottomed in 1986, the compound annual growth rate for farmland values (adjusted for inflation) has been 4 percent.
- Credit conditions improved. Farm loan repayment rates, and rates of loan renewals and extensions all improved. Interest rates on farm loans moved even lower. The average loan-to-deposit ratio of 71.8 percent was the lowest in seven years.
- Bankers anticipated higher volumes of operating, farm machinery, and grain storage construction loans, as well as more loans guaranteed by the Farm Service Agency.
Production
- According to the U.S. Department of Agriculture (USDA), national corn production was 12.4 billion bushels for 2010—5 percent less than in 2009 and the third-largest corn harvest on record. U.S. soybean production in 2010 was estimated as the second largest on record, at 3.33 billion bushels, 0.9 percent below the level of 2009.
- District production of corn in 2010 was estimated at 5.82 billion bushels, 6 percent below the level of 2009. District production of soybeans in 2010 was estimated at 1.39 billion bushels, 5 percent above the level of 2009.
- The USDA pegged the 2010 national corn yield at 153 bushels per acre—the fourth highest ever. The District corn yield was the sixth highest, at 160 bushels per acre. In the District, Iowa and Illinois ended up with their lowest corn yields in seven and five years, respectively.
- For the U.S., the 2010 soybean yield of 43.5 bushels per acre almost matched the previous year’s record. A record soybean yield (50.1 bushels per acre) was set for the District.
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