The Federal Reserve Bank of Chicago just released the November issue of their Agricultural Newsletter (Fed Ag Newsletter). This quarterly publication summarizes survey responses from agricultural bankers in the region. A few notable highlights include:
1. Land values in the third quarter increased 2% across the Seventh District (IL, IN, IA, MI, WI). The biggest increase was in IA (+4%), while a drop of 1% was seen in WI & IN.
2. On average, land prices are still 4% below the levels of a year ago.
3. Agricultural credit conditions are weaker than a year ago, especially in the livestock areas. An increase in the number of forced liquidations in the livestock industry is expected in 2010.
4. 69% of those surveyed expect land values to remain stable for the near future, with 27% expecting continued weakness.
Much of the Fed’s information correlates what we’ve been seeing in our business, though I think land values may be stronger than what some of the bankers are forecasting. Personally, I think there is still a lot of “hold over” profits from 2006 – 2008 and farmers won’t pass up the opportunity to aggressively bid on a tract of land that is close to them.
We would like to know your thoughts. Feel free to send them to: loranda@loranda.com
