One of Farm Credit System’s largest banks, AgriBank, predicts that $4.50 per bushel corn and a slight increase in interest rates will cause a decline in farm land values of between 30% and 34% across 15 states from Wyoming to Ohio and from Minnesota to Arkansas. However, the bank predicts that the decline would be a soft decline and will occur over the course of years unlike the crash of the 1980s. Although this estimated decline seems significant, in 2013 alone North Dakota saw farm land values increase by 41.5%, South Dakota saw a 30.2% increase, Minnesota saw a 19.8% increase, Nebraska saw a 19% increase and Iowa saw a 17.8% increase. Of the various value-affecting factors, AgriBank states that corn prices hold the most influence. For every $1 drop in corn prices, average district cropland values could decline by $298 per acre. The bank forecasts average U.S. corn prices of $4.56 per bushel for 2013/14, $4.12 per bushel for 2015, and a gradual increase in average price to $4.33 per bushel by 2017 and interest rates are not expected to exceed 4% until early 2017.
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