The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Mike Walsten has covered major business trends in agriculture for more than 40 years.
Central Corn Belt farmland values continue to decline, according to the Federal Reserve Banks of Chicago. The bank, which covers all of Iowa, the northern thirds of both Illinois and Indiana, the lower peninsula of Michigan and southeast Wisconsin, says the value of "good" agricultural farmland slipped 1% versus a year earlier through the second quarter of 2016. While down on an annual basis, the bank says values rose 1% during the quarter versus the first quarter.
At the state level, the bank notes Illinois farmland values are up 1% on an annual basis, Indiana values are down 2%, Iowa values are off 6%, Michigan prices are down 1% and Wisconsin values are up 7%. On a quarterly basis, Illinois values are up 2%, Indian down 3%, Iowa unchanged, Michigan down 1% and Wisconsin up 5%.
Only 1% of bankers say they expect farmland values to rise going forward while 48% look for a decline in value and 51% expect prices to remain stable.
More land news included in every LandOwner Newsletter issue. Try it free here.
Local land values and selling prices seem to indicate development potential for urban growth. $15,000/acre and higher prices can't be paid from production and current grain prices. Even land averaging may not justify adding adjoining property to the farm even towards expansion for a new farming family member.
I remember the 1970's boom and 1980's bust when prime land sold for $2500/acre and those purchasing that land aren't farming today.
Agreed Ed ! I know the 80 ac was bought for farm acreage... While the potential may be there for development as it sits on a highway, the purchaser paid for it for proximity to home farm. The 150 is in the middle of nowhere.
Well , like usual , i must live in the extremities-the 1%- of the bell curve of these laws of averages that must get thrown out of the factor - $20,000 an ac for 150 tillable and $14,000 an ac for 80 ac - neither farm would avg 175 bu corn !!! Ridiculous!