Farmland Values: On A Tipping Point?

February 15, 2019 08:54 AM
The same storyline continues for farmland values: stable. But could values be headed South?

The same storyline continues for farmland values: stable. For 2018, values for good farmland in the upper Midwest showed almost no change from a year ago, according to a recent report from the Federal Reserve Bank of Chicago.
For the fourth quarter of 2018, there were no year-over-year changes in agricultural land values in Illinois, Indiana and Wisconsin. Iowa’s farmland values dropped by 1%. For the region, farmland values were up 1% in the fourth quarter of 2018 relative to the third quarter but flat from January 2018.

Chicago Fed - Changes in Farmland Values
Source: Federal Reserve Bank of Chicago

After accounting for inflation, the District actually experienced a yearly decrease of 2% percent in farmland values for 2018, according to David Oppedahl, senior business economist for the region. 

“This was the fifth straight annual real decline in District farmland values—the longest downturn since the 1980s,” Oppedahl writes. “The District’s farmland values fell 13% percent in real terms from their peak in 2013 to the end of 2018. But the decrease in agricultural land values over this span was just 6% percent in nominal terms.

Annual Real Change in Seventh District Farmland Values

Annual real change in Seventh District farmland values

Source: Federal Reserve Bank of Chicago

Strong crop yields in the region supported farmland values in 2018. Yet, livestock and dairy operations continue to see significant financial challenges.

“Dairy is the most stressed sector—financial stress and the tough January weather have many of our farmers ready to sell out,” commented a Wisconsin banker.

Another Wisconsin banker reported, “There was an increase in voluntary liquidations this past year.” 

There were some trends, Oppedahl reported, counteracting the downward pull on farmland values from declining livestock prices. “Survey respondents mentioned that available farmland for sale continued to be in limited supply, plus nonfarm investors were bidding up farmland values in some areas.”

Although 75% of the responding agricultural bankers, which serve the northern two-thirds of Illinois, Indiana, Iowa, the lower peninsula of Michigan and southeastern Wisconsin, expected farmland values to be stable during the January through March period of 2019, nearly all of the rest expected farmland values to move down.

Credit Conditions Continue to Deteriorate 

For the end of 2018, deteriorating agricultural credit conditions continued, according to area bankers. Repayment rates on non-real-estate farm loans decreased in the fourth quarter of 2018 relative to the same period of 2017, and rates of loan renewals and extensions increased. 

The share of the District farm loan portfolio indicated as having “major” or “severe” repayment problems was 6.6% in the fourth quarter of 2018—the highest such share since 1999. 

“The rising interest rate environment is beginning to cause repayment problems,” reported an Iowa banker.

At the start of 2019, survey respondents indicated that only 2.4% (a bit lower than a year ago) of their farm customers with operating credit in 2018 were not likely to qualify for new operating credit in the year ahead. Additionally, the majority of survey respondents anticipated capital expenditures by farmers would be lower in the year ahead compared with the year just ended (for the sixth year in a row).


Read More

Midwest and Mid-South: Farm Income Down, Farmland Values Up

Farmland Supply Overshadowing Demand

John Phipps Revisits “Dirt Is Destiny”

Back to news


Spell Check

Memphis, TN
2/15/2019 09:27 AM

  Yes; they should be. Considering most fund buying is now accepting 3% or less net returns and the overall commodity trends don't show any immediate improvement we are probably there. High real estate taxes in parts of our regions and having an impact as well. If you isolate the appraisal process down to just the income approach the answer is already there.

Reacheal Mills
Los Angeles, CA
2/16/2019 06:29 AM

  I AM FINIALLY OUT FINANCIAL BONDAGE THANKS TO MOORE LOAN COMPANY ( Or text +1(414) 454-9493. I am Reacheal Mills currently in California USA. I would like to share my experience with you guys on how I got a loan of $170,000.00 USD to start up a new business. It all started when i lost my home and belongings due to the bank draft I took to offset some bills and some personal needs. I became so desperate and began to seek for funds at all means. Luckily for me I heard a colleague of mine talking about this company, I got interested although i was scared of being scammed, I was compelled by my situation and had no choice than to seek advise from my friend regarding this very company and was given their contact number, getting intouch with them really made me skeptical due to my past experience with online lenders, little did i know this very Company "MOORE LOAN COMPANY". was a godsent to me and my family and the entire Internet World, this company has been of great help to me and some of my colleague and today am a proud owner of well organized business and responsibilities are well handled all thanks to of Robbinson Moore ( So if really you are genuinely in need of a loan either to expand or start up your own business or in any form of financial difficulty, i advise you give Mr Josef Lewis of Progressive loan the opportunity of financial upliftment in your life Email: OR Call/Text +1(414) 454 9493. Thanks.

Austin, TX
2/16/2019 10:11 AM

  AgWeb, keep the obvious advertising for loan company off your comments section.


Corn College TV Education Series


Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!


Market Data provided by
Brought to you by Beyer