Wednesday, May 18, 2011

The First Quarter of 2011 Farmland Price Report from the Federal Reserve Bank of Chicago

Note that this post features highlights from the Seventh Federal Reserve District's First Quarter 2011 report on Farmland values and credit conditions. This district is made up of five states, which includes all of Iowa, and most of Illinois, Indiana, Michigan and Wisconsin. ---KM

  • The surge in District farmland values continued, with a 16 percent increase for the first quarter of 2011 compared with the first quarter of 2010.
  • The quarterly increase in District farmland values was 5 percent—more than double the quarterly increase of a year ago.
  • Illinois and Indiana had the biggest quarterly increases (8 percent for each).
  • The quarterly increase in the value of “good” agricultural land was 5 percent.
  • Farmers (rather than investors) purchased a higher proportion of the acres sold as well.
  • The number of farms sold, the acreage sold, and the amount of farmland for sale grew.
  • New farm operating and real estate loans averaged 6.01 percent and 5.80 percent, respectively, as of April 1, 2011.
  • For the second quarter of 2011, 56 percent of the responding bankers expected farmland values to continue rising in their areas and 2 percent expected a decline.
  • Farm machinery, grain storage construction, and real estate loan volumes were expected to increase in the second quarter of 2011 compared with the second quarter of 2010.


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