Central Corn Farmland Posts 22% Annual Gain; Highest Since 1976

Published on: 00:20AM Feb 17, 2012

Mike Walsten

The value of Central Corn Belt cropland rose 22% in 2011, the strongest percentage increase since 1976, reports the Federal Reserve Bank of Chicago which serves the northern two-thirds of Illinois and Indiana, all of Iowa, the Lower Peninsula of Michigan and southeastern Wisconsin. Even after adjusting for inflation, the gain is still the highest (19%) since 1976. For perspective, the value of Central Corn Belt farmland rose by more than 20% for four successive years in the 1970s, 1973, 1974, 1974 and 1976 with 1976's annual increase the strongest at nearly 30%. The bank also notes farmland values in its district rose 4% during the fourth quarter of 2011 compared to the third quarter of 2011.

The bank reports farmland values have recorded a compounded inflation-adjusted annual growth rate of 5.5% since land values bottomed in 1986 and a 2.9% annual compound growth rate since 1970. The bank also reports more than 40% of the bankers responding to its quarterly survey expected farmland values to rise during the first quarter of 2012. Iowa posted the strongest annual increase, 28%, followed by a 27% gain for Indiana, a 21% increase for Illinois and an 18% gain for Wisconsin.

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