Farmland prices in the Seventh Federal District increased 1% in the first quarter 2014 year on year, but decreased 1% compared to the fourth quarter of 2013 according to the Federal Reserve Bank of Chicago’s Farmland Values and Credit Conditions Report. This quarter-to-quarter decrease is the first such decrease in five years. The only two areas that saw an increase over the fourth quarter of 2013 were Iowa and Wisconsin. Any greater increases in value were held down by the fall in corn and soybean prices which decreased by 37% and 8.5% respectively from the first quarter of 2013. Over three quarters of the bankers surveyed predicted farmland values will remain stable in the second quarter of the year; 26% reported a decreased in demand for farmland in the first quarter and 19% reported an increase in demand, while 51% reported less farmland for sale in their area. Cash rents fell 2% year on year for the first time since 1999 due to lowered expectations for profits in 2014. Credit conditions for the first quarter were positive. Loan demand and available funds were both up but loan repayment rates were down because of the lingering drought in the area. The Seventh Federal District is comprised of the entire state of Iowa, and portions of Illinois, Indiana, Wisconsin, and Michigan.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free weekly enhanced eNews service