The value of "good" Central Corn Belt farmland rose 4% on a quarterly basis during the first quarter of 2013, according to the Federal Reserve Bank of Chicago. While a gain, the pace of the increase is down from the 7% rise posted during the fourth quarter of 2012. On an annual basis, farmland rose 15% for the year ending Mar. 31, nearly matching the 16% annual increase reported for the year ending Dec. 31. The bank notes the strong annual increases noted in Illinois, Indiana, Iowa and Michigan "masked the weaker results of some areas, such as Wisconsin." The Chicago Federal Reserve Bank serves the northern two-thirds of both Illinois and Indiana, all of Iowa, the Lower Peninsula of Michigan and southeastern Wisconsin.
Michigan led the charge higher with a 24% annual increase and a 12% gain versus the fourth quarter of 2012. Iowa marks a 20% annual gain and a 3% quarterly rise. Illinois lists a 19% annual increase and a 5% rise on a quarterly basis. Indiana reports a 15% annual increase and a 4% quarterly rise. Wisconsin, however, reports a 3% annual decrease and a "no change" for the quarterly comparison.
Looking ahead, 19% of survey expect farmland values will trend higher in the second quarter of 2013 while 4% expect them to decrease. The vast majority anticipate farmland values will remain stable.
The bank survey also found cash rental rates rose 11% from 2012, a smaller annual increase than reported the previous two years. On a state-by-state basis, Illinois is up 9%; Indiana, 11%; Iowa, 13%; Michigan, 2%; and Wisconsin, 12%. The bank says district cash rental rates rose almost 10% on an inflation-adjusted basis, the fourth-largest increase in rates in the history of the survey.
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