From chicagofed.org: Farmland values for the Seventh Federal Reserve District rose 9 percent in the second quarter of 2023 from a year earlier. This year-over-year gain was the smallest one since the first quarter of 2021. Values for “good” agricultural land were up 3 percent in the second quarter of 2023 from the first quarter, according to survey responses from 153 District agricultural bankers. Nine percent of survey respondents forecasted higher District farmland values during the third quarter of 2023, while 5 percent forecasted lower values; the remaining 86 percent forecasted farmland values to be stable during the July through September period of this year.
Overall agricultural credit conditions for the District were better in the second quarter of 2023 than a year ago, even though farm interest rates were higher. Average nominal interest rates on farm operating, feeder cattle, and farm real estate loans moved up during the second quarter of 2023, ending at their respective highest points since the third quarter of 2007. With repayment rates for non-real-estate farm loans higher than a year ago, the portion of the District’s agricultural loan portfolio reported as having “major” or “severe” repayment problems (1.3 percent) was at its lowest level on record for a second quarter. Also, renewals and extensions of non-real-estate farm loans in the District were down from a year earlier. For the April through June period of 2023, the demand for non-real-estate farm loans was lower than a year ago, as was the level of funds available for lending by agricultural banks. For the second quarter of 2023, the District’s average loan-to-deposit ratio rose to 72.8 percent—the highest reading since the fourth quarter of 2020.
Percent change in dollar value of “good” farmland
| April 1, 2023 to July 1, 2023 | July 1, 2022 to July 1, 2023 | |
|---|---|---|
| Illinois | +2 | +9 |
| Indiana | 0 | +23 |
| Iowa | +1 | +2 |
| Michigan | * | * |
| Wisconsin | +6 | +8 |
| Seventh District | +3 | +9 |
Top: April 1, 2023 to July 1, 2023
Bottom: July 1, 2022 to July 1, 2023