Biggest rise in Midwest land values in over a decade
Agricultural bankers reported a 22% increase in farmland values in the central Corn Belt during 2021, and they expect values to continue to rise in the opening months of this year, said the Chicago Federal Reserve Bank on Thursday. Iowa had the largest increase, 30%, in the five-state Chicago Fed district.
“On the whole, the district experienced a very steep annual increase of 22% in its farmland values in 2021,” said the Chicago Fed in its quarterly AgLetter. “In nominal terms, 2011’s annual increase was the last gain as large as 2021’s.” The increase in land values was aided by low interest rates, government subsidies to farmers, strong commodity prices, and high corn and soybean yields.
Some 56% of bankers taking part in a Chicago Fed survey said they expect farmland values would rise in the first quarter of 2022; only 1% predicted a decline. An Illinois banker cautioned, “Farmers were able to realize nice profits in 2021; 2022 could be much more difficult to do so with the rise in the costs of all inputs.”