This week three Federal Reserve Bank districts released their quarterly land values and credit conditions reports. While the reports do show a continuing decline of prices and farm income, they reveal farmland values remain relatively steady.
The Kansas City Fed’s report showed the farm economy is deteriorating as commodity prices grind lower. They say credit conditions eroded in the second quarter of the year and bankers reported a modest increase in the number of borrowers unable to repay loans.
When it comes to land values, they are slightly lower in the KC Fed’s district as well. The value of irrigated cropland saw the largest decrease, nearly 4%, from a year ago. Ranch land values are lower but continue to fall a very low rate, of 2%. Year-over-year, the decline in value of non-irrigated cropland was the smallest since early 2015, down 1%.
The St. Louis district, which covers the southern Corn Belt and mid-South, bankers say there’s less volatility when it comes to farm income because it’s based on more contract poultry growers than row crop farmers.
Farmland prices in the area fell 3.5% in the second quarter, but ranch and pasture values climbed 1.6%.
Land values in the Midwest are holding steady. The 7th Federal Reserve district reported farmland edging up 1% in the second quarter. Wisconsin saw land values clime the most, up 4% and Illinois was the only state to see them decline, with a 2% dip.