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Farmland Value Rises by Double Digits

Friday, August 13th, 2021 -- 12:01 PM

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(Wisconsin Ag Connection) All of the states within the Seventh Federal Reserve District saw their farmland rise in value by double-digits during the second quarter of 2021 when compared to last year.

According to the Wisconsin Ag Connection, that's according to the latest survey of agricultural lenders in the district, ag property values were 14 percent higher than the same period in 2020, the largest such gain in eight years.

And they rose by three percent between the months of April through May over the previous quarter. In the most recent questionnaire of 152 rural bankers, survey respondents noted that Wisconsin properties were up 13 percent over last year, but were unchanged since the first quarter.

Farmland in Illinois and Indiana were 12 percent higher, while Iowa's went up by 18 percent for the year. Michigan trends were not calculated due to the lack of adequate survey responses.

By the end of July 2021, the Coronavirus Food Assistance Program had dispersed over $5.7 billion to farm operations in the five states of the District, while additional resources flowed to agriculture through the Paycheck Protection Program.

In addition, corn and soybean prices have been supported by tight stocks, higher levels of exports during the pandemic, and concerns about the impact of drought on yields in the western Corn Belt.

The USDA forecasted prices for the 2021-22 crop year of $5.60 per bushel for corn and $13.70 per bushel for soybeans. When calculated with these prices, the projected revenues from the 2021 U.S. harvests relative to revenues from the previous year's would be 29 percent larger for corn and 50 percent larger for soybeans.

Looking ahead, bankers indicated that the trends of the past quarter are expected to continue well into the remainder of the year. About 70 percent of survey respondents anticipated farmland values to rise in the next three month, while 30 percent thought they would stabilize.

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