Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

U.S. Midwest Farmland Values Jumped 15% in 1st Quarter, Fed Says

May 16 (Bloomberg) -- Farmland values in the U.S. Midwest jumped 15 percent in the first quarter from a year earlier as demand for acres increased amid rising rental rates, the Federal Reserve Bank of Chicago said.

Farmland cash-rentals in the Seventh Federal Reserve District that encompasses Iowa, Illinois, Indiana, Michigan and Wisconsin gained 11 percent, the Chicago Fed said in a report today. Farmland values rose 4 percent in the first quarter from the prior three months. About 59 percent of bankers in a survey conducted by the agency said they’d observed stronger demand for farmland, the report said.

“Good-farmland values kept rising during the first quarter of 2013,” wrote economist David B. Oppedahl, the author of the report. “Demand to purchase agricultural land increased in the three-to-six-month period ending with March 2013 compared with the same period a year ago.”

Farmland values in Michigan led the gains, surging 24 percent, according to the report. Values in Iowa, the biggest U.S. producer of corn and soybeans, rose 20 percent, Illinois land gained 19 percent and Indiana increased 15 percent. Wisconsin values dropped 3 percent.

Land in southwestern Illinois rose the most, jumping 31 percent, according to the report. Values in southern Iowa gained 27 percent, while land in northern Wisconsin dropped the most, declining 6 percent this year.

Credit availability improved in the region with 61 percent of survey respondents saying their banks had more funds to lend, Oppedahl wrote. About 47 percent of bankers surveyed reported higher repayment, while 4 percent said rates were lower. Land values could decline as grain and oilseed prices are expected to fall this year, the Fed said.

Rain that has delayed planting this spring “revitalized” subsoil moisture, curbing drought conditions in the region, Oppedahl said. Corn prices in the year that starts on Sept. 1 will average $4.30-$5.10 a bushel. That’s down from a U.S. Department of Agriculture forecast for $6.70-$7.10 in the prior season.

To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.