IBJNews

Midwest farmland value jumps most since 1977, Fed says

Back to TopCommentsE-mailPrintBookmark and Share

Farmland values in the U.S. Midwest surged 25 percent during the third quarter, the most since 1977, as higher grain and livestock earnings boosted demand for acreage, the Federal Reserve Bank of Chicago said.

Rising net income for corn and soybean growers and improved cattle, hog and milk earnings supported higher land prices from a year earlier in Iowa, Illinois, Indiana, Michigan and Wisconsin, the Fed said Tuesday in a report. Land values rose 7 percent from the second quarter, and 39 percent of the 216 bankers surveyed forecast higher values in the fourth quarter.

“There has continued to be very strong increases in land values this year,” David B. Oppedahl, a business economist at the Federal Reserve Bank of Chicago, said in a presentation at the bank.

Farmland values in Iowa, the biggest producer of corn and soybeans, rose 31 percent from a year earlier, up 11 percent from the second quarter, according to Fed data. Indiana jumped 29 percent in the past year, Illinois advanced 23 percent, Wisconsin increased 17 percent, and Michigan rose 16 percent.

The five-state region has seen land values increase at a 5-percent compounded rate since prices bottomed in 1986, Oppedahl said in the report. About 40 percent of the bankers surveyed expected an increase in farm real-estate loans during the fourth quarter, according to the Chicago Fed.

Falling interest rates for operating and real-estate loans improved credit conditions for agricultural producers in the third quarter, the bank said in the report. Repayment rates on farm loans rose from the year-earlier quarter, while loan renewals and extensions declined.

Loans to buy farm machinery and build grain storage were expected to rise in the current quarter from a year earlier, the Fed said. The value of all livestock loans was forecast to fall in the final quarter of 2011, relative to a year earlier.

U.S. farmland prices will continue climbing as long as agricultural commodities remain high, said Brent Gloy, an agricultural economist at Purdue University.
Farmland is “headed higher” in the short term, Gloy said during a presentation in Chicago. “Prices will go down someday. I just don’t think it’s anytime soon. At some point, they may go down substantially. Remember, we’re dealing with commodity prices, and commodity prices are very volatile.”
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. If I were a developer I would be looking at the Fountain Square and Fletcher Place neighborhoods instead of Broad Ripple. I would avoid the dysfunctional BRVA with all of their headaches. It's like deciding between a Blackberry or an iPhone 5s smartphone. BR is greatly in need of updates. It has become stale and outdated. Whereas Fountain Square, Fletcher Place and Mass Ave have become the "new" Broad Ripples. Every time I see people on the strip in BR on the weekend I want to ask them, "How is it you are not familiar with Fountain Square or Mass Ave? You have choices and you choose BR?" Long vacant storefronts like the old Scholar's Inn Bake House and ZA, both on prominent corners, hurt the village's image. Many business on the strip could use updated facades. Cigarette butt covered sidewalks and graffiti covered walls don't help either. The whole strip just looks like it needs to be power washed. I know there is more to the BRV than the 700-1100 blocks of Broad Ripple Ave, but that is what people see when they think of BR. It will always be a nice place live, but is quickly becoming a not-so-nice place to visit.

  2. I sure hope so and would gladly join a law suit against them. They flat out rob people and their little punk scam artist telephone losers actually enjoy it. I would love to run into one of them some day!!

  3. Biggest scam ever!! Took 307 out of my bank ac count. Never received a single call! They prey on new small business and flat out rob them! Do not sign up with these thieves. I filed a complaint with the ftc. I suggest doing the same ic they robbed you too.

  4. Woohoo! We're #200!!! Absolutely disgusting. Bring on the congestion. Indianapolis NEEDS it.

  5. So Westfield invested about $30M in developing Grand Park and attendance to date is good enough that local hotel can't meet the demand. Carmel invested $180M in the Palladium - which generates zero hotel demand for its casino acts. Which Mayor made the better decision?

ADVERTISEMENT