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.
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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