According to the May 2009 newsletter released by the Federal Reserve Bank of Chicago, there was a 6% decrease in dollar value of “good” farmland across the Seventh District, which is comprised of Illinois, Indiana, Iowa, Michigan & Wisconsin. Also, the rate of increase has slowed to 2% growth for the same region from April 1, 2008 to April 1, 2009. These numbers were derived from a survey of 227 bankers in the Seventh District.
Cash rent rates have slowed down as well into 2009, but overall they are still 7% higher than 2008 rates in the region. The article speculates that part of the slower adjustment of cash rent rates relative to land prices is due to 2009 leases being locked in before the decrease in commodities prices that we saw last fall.
With an eye towards the future, nearly two-thirds of the surveyed bankers believe that we will see farmland values hold steady in the second quarter of 2009.
To download an Adobe pdf file of the entire AgLetter, follow this link: The Agricultural Newsletter from the Federal Reserve Bank of Chicago, May 2009
Do you have any thoughts on the information presented in this post? We would love to hear your comments. E-mail us at eric@loranda.com and let us know what you think!
Source: Federal Reserve Bank of Chicago, www.chicagofed.org
Tags: farmland, Illinois, Indiana, Iowa, land value, Wisconsin
