The Federal Reserve Bank of Chicago just released the May issue of their Agricultural Letter. This publication focuses on farmland values and agricultural credit conditions across the Midwest. The Fed gathers their information by surveying 215 bankers across the region and while the letter does a great job of discussing general trends in the agricultural community, keep in mind that specific “micro” areas, e.g., counties, townships, etc. may differ from state averages.
So what did we learn in the May issue? As expected, farmland values increased in the first quarter of 2010, with the “I” states (Indiana, Illinois, Iowa) leading the way. In addition, values in these areas were up from 4 – 8% over the same period last year. Interest rates for farm loans in the first quarter of this year were lower than anytime during the past 24 months. And finally, the letter also had some interesting articles that discussed the Price-to-Earnings ratio for farmland, loan repayment rates, and the outlook for land prices for the second quarter (85% thought that they would remain unchanged).
If you’re truly interested in following agricultural trends in the Corn Belt, I would suggest subscribing to this publication (or continue reading our blog in the future!). It’s one government report that I find both interesting and informative.
