The value of central Corn Belt farmland rose 16% in 2012, according to a quarterly survey of ag bankers conducted by the Federal Reserve Bank of Chicago. It's survey found the pace of the increase in farmland values increased during the fourth quarter of 2012 -- a 7% rise during the quarter compared to the previous quarter. Iowa posted the strongest percentage annual increase, 20%, while Illinois and Michigan both registered 18% annual gains. Wisconsin reported an 11% rise while Indiana listed a 10% increase. On a quarterly basis, Illinois reported a 9% increase while Iowa listed an 8% rise followed by Indiana with a 7% gain, Wisconsin a 6% increase and Michigan a 3% rise.
The Federal Reserve Bank of Chicago serves the northern two-thirds of Illinois and Indiana, all of Iowa, the lower peninsula of Michigan and southeastern Wisconsin.
Bank business economist David B. Oppedahl states that after adjusting for inflation, district farmland values rose 14% in 2012. That percentage gain is the third largest in 35 years, he notes. District farmland values have posted a cumulative rise of 52% over the three-year period 2010-2012, which matches the fastest percentage gain of the 1970s boom (1974-1976), he observes.
Some 71% of responding bankers expect farmland values to be stable in the first quarter of 2013 while 28% expect values to increase during the first quarter. In addition, Oppedahl observes: "With the USDA predicting net farm income to rise 14% from 2012 to $128.2 billion in 2013, there
would seem to be at least another leg to be run as farmland values continue their upward race."
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