White-hot farmland values in the Heartland show no signs of cooling off. —The Editors
The Chicago Fed reports that agricultural land values in the five-state district jumped 19 percent higher in the first quarter of 2012 compared with the first quarter of 2011. Leading the pack? The Hawkeye State. Farmland values in Iowa showed a 27 percent year-over-year increase.
“The momentum for rising farmland values was generated by higher commodity prices and net farm incomes last year.”
“Bidding among farmers was common at farmland auctions, driving up winning bids.”
“Forty percent of the survey respondents observed a higher share of land purchased by farmers versus investors, while 7 percent observed a lower share, in the period from October 2011 through March 2012.”
“… the number of farms sold, acreage sold, and the amount of farmland for sale over the winter and early spring rose more sharply than a year ago.”
“A third of the responding bankers expected farmland values to increase during the April through June period, while 1 percent expected declines. Nearly two-thirds of the respondents looked for farmland values to stabilize.”
Read the complete report at www.ChicagoFed.org.
Download the digital version of The Land Report’s Summer 2012 edition here.