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Milk prices push farmland up in Chicago Fed District

While farmland values have been slipping in grain country, it’s quite another story in dairy country.  The Federal Reserve Bank of Chicago says the value of good agricultural land in their district increased 2 percent from the first quarter to the second quarter and are 3 percent above a year ago.  A survey of 230 bankers found land values in Wisconsin jumped 6 percent from April 1^st to July 1^st, southeastern Wisconsin increased 8 percent. Illinois gained 3 percent and Iowa was up 1 percent. Indiana declined 1 percent.  There were not enough responses out of Michigan to determine change.

Compared to a year ago: Illinois is up 3 percent, Wisconsin up 1 percent, Indiana is even and Iowa is down 1 percent.

Demand for non-real estate farm loans rose in the second quarter compared to a year ago.  Collateral requirements for loans tightened a little in the second quarter although the banks report they have more funds to lend.  Interest on operating loans declined to 4.86 percent and real estate loans increased slightly to 4.67.  The bankers report that while 93 percent of their farm loan portfolios have no significant repayment problems; repayment rates for non-real estate farm loans were lower than a year earlier.

Read more from the Chicago Federal Reserve here: