Farmland Values Up But Lower Than 2012

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% in the district from the fourth quarter of 2012. They are up 15% from the first quarter of a year ago. Cash rental values are up 11% 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, according to their report.

Ag credit conditions improved for the quarter as well, 61% of the banks responding said they had more funds available and only 1% said they had less. Fourty-seven percent of the banks responding reported higher rates of repayment and 35% reported fewer loan renewals and extensions. Fourty-six percent of the bankers noted lower demand for non-real estate farm loans and 13% reported higher demand.

The average loan-to-deposit ratio is the lowest it has been since 1994, 89% 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:

 (Note: 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.)