From agupdate.com: 

Compared to the last two years, the mid-year land values report, given by Luke Worrell chair of Land Values Conference, at the Farm Progress Show in Decatur on Aug. 30, was anti-climactic.

The snapshot of land values, sponsored by the Illinois Society of Professional Farm Managers and Rural Appraisers, shows stable land values in what he calls a “catch-your-breath” report after two years of a break-neck pace.

“It’s the first time in a long time I don’t have any crazy numbers to throw out,” Worrell said after land values increased between 40% and 50% in some cases during the last couple of volatile years.

“You can’t have 20% increases every year,” said University of Illinois ag economist Gary Schnitkey.

The report comes from a survey of Illinois Society members about what they saw in the first six months of the year and what they expect for the next six months. Not much has changed since the beginning of 2023, Worrell said.

According to Bruce Sherrick, professor at the University of Illinois, you might not need to worry about what inflation is doing to your farmland values.

From AgWeb.com:  

The Federal Reserve is hosting its Economy Policy Symposium this week, which has all eyes on Jackson Hole Wyoming for further details on inflation, interest rates and if a recession is looming. But would a recession effect your operation the way you think? 

According to Bruce Sherrick, professor at the University of Illinois, you might not need to worry about what inflation is doing to your farmland values.

“Farmland returns are very highly correlated with inflation,” Sherrick says. “Most importantly, it has a positive correlation with inflation.”

Sherrick says this correlation is derived from the size and debt of the industry.

“Put the entire holdings of the country on one balance sheet and it’s now four trillion plus and only 13% leveraged, so 13% debt underneath it,” he says. “An interest rate change doesn’t have as big of a proportional impact as if you were talking about companies traded on the stock exchange, where the average leverage turns out to be around two-thirds.”

While the percentage of debt is low in comparison, he also highlights it’s mostly long-term, fixed-rate debt. Increasing interest rates won’t have as large of an impact on that, but it will decrease transactions.

From Farm Policy News: In a recent update from the Federal Reserve Bank of Kansas City (“Farmland Values Stay Resilient as Farm Economy Moderates“), Francisco Scott and Ty Kreitman indicated that, “Strength in farm real estate values persisted in the second quarter despite some moderation in the farm economy and higher interest rates.

“Growth in farmland values eased from the surge of recent years, but remained strong through the first half of 2022.

Scott and Kreitman noted that, “Farm income moderated in all the participating Districts during the second quarter. Following nearly two years of considerable strength, improvement in farm income waned according to Federal Reserve Surveys of Agricultural Credit Conditions.”

From USDA: Non-irrigated cropland cash rent averaged $151.00 per acre in Wisconsin during 2023, $6.00 higher than 2022 according to the latest report released by USDA’s National Agricultural Statistics Service. Pasture rented for cash averaged $37.50 per acre, $1.50 above 2022.

Lafayette County had the highest published cash rent for non-irrigated cropland at $259.00 per acre, followed by Grant County at $241.00 per acre. Dane, Brown, and Walworth rounded out the top five. Douglas County, at $20.00 per acre, had the lowest average cash rent for non-irrigated cropland.

Rock County had the highest published pasture cash rent at $76.50 per acre, followed by Lafayette at $69.50 per acre. Forest and Price Counties had the lowest pasture cash rent at $11.00 per acre.

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

Top: April 1, 2023 to July 1, 2023

Bottom: July 1, 2022 to July 1, 2023

Farmers National Company is one of our valued customers and providing value to all our customers is one of our highest goals.  Make sure to check out their mid-year land values report released Tuesday, July 11, 2023.  Their report details and charts how the land market entered a period of de-escalation that started in the fourth quarter of 2022, as well as the current single digit increases in land values verses the double digits over last year.

From AgWeb.com : 

The No. 1 question farmers are asking Paul Schadegg today is whether land values have finally hit a plateau after their long, multi-year run of growth.

That depends, he says, on the region where the farmer is located. In general, he sees a slowdown in price increases across the country but no lower prices for high-quality farmland. 

“When we compare not just our company data but also data from the Federal Reserve surveys, we’re definitely seeing some settling, a de-escalation,” says Schadegg, Farmers National Company (FNC) senior vice president of real estate operations. 

Along with that, he says there are fewer high-quality parcels of land coming to the marketplace.

           June High Quality Values Per Acre

    Average Land Prices

Source: Farmers National Company Agent Survey

From PrairieFarmer.com July 2023 Digital Edition: The Supreme Court delivered a landmark decision on May 25 that will significantly curtail the Environmental Protection Agency’s ability to regulate certain bodies of water.  In a decision that was technically unanimous, the court ruled in favor of an Idaho landowner in the long-running Sackett v. EPA case.

                                                            Photo by Sharrocks/Getty Images

From Successful Farming: Higher interest rates and weaker commodity prices may slow the momentum for even-higher farmland values, said the Chicago and Kansas City Federal Reserve Banks in quarterly reports.

Photo: Photo Credit: USDA

From farmdoc daily: they look at the downward pressures on farmland prices in 2023.  Both cash rents and farmland prices have increased over the years.  Farming returns likely will decline from 2021 and 2022 levels and interest rates likely will remain at higher levels than in recent years.  Both declining returns and stable interest rates suggest downward pressures on farmland prices.  While downward pressures may occur, those price declines may be in the future.

This parcel of land in Burleigh County is irrigated by a direct pipeline from the nearby Missouri River. Pifer’s co-founder and president Kevin Pifer believed its unique qualities helped steer the sale price into “likely” record territory.  Contributed / Pifer’s

A recent Pifer’s auction drew over 50 bidders for a “rare” offering: irrigated farmland in central North Dakota. The final sale price of $8,000 per acre is thought to be record-setting